TDR Capital to take Arrow private in £563m deal

TDR made its first offer of 250 pence for the entire share capital of Arrow last December and subsequently raised its bid to 290 pence per share in January 2021 and to 305 pence per share in February 2021.

The offers were rejected by Arrow as they undervalued the company, the firm said. Later on in February, TDR further increased its offer to 307.5 pence per share, which has now been accepted by Arrow's board.

The offer price represents a premium of 33.4% to the closing price of 230.5 pence per share on 5 February 2021, the last business day before the beginning of the offer period.

Shares in Arrow were up 5% to 304.5 pence at the time of writing (1 April 2021).

Previous funding
Pollen Street Capital, via its Special Opportunities Fund, acquired a majority stake in Arrow Global in 2009 and exited the investment in 2014.

Arrow listed on the London Stock Exchange in 2013. Its shares were priced at 205 pence each, valuing the firm at approximately £357.6m.

Company
Established in 2005 and headquartered in Manchester, Arrow is an asset manager specialised in acquiring and managing secured and unsecured loan and real estate portfolios from and on behalf of financial institutions, such as banks, institutional fund investors and specialist lenders.

The company has operations in the UK, Italy, Portugal, Ireland, the Netherlands and Belgium.

Arrow has €4.3bn in assets under management. The firm reported a loss before tax of £114.8m in 2020 and negative EBITDA of £37.7m, following a £51.3m profit in 2019 with positive EBITDA of £125.3m.

People
TDR Capital – Jonathan Rosen (partner).
Arrow Global – Zachary Lewy (founder).

Advisers
Equity – Kirkland & Ellis (legal).

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