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September 7, 2022updated 08 Sep 2022 4:05am

UK digital identity provider GBG could be set for £1.3bn takeover

The digital identity specialist could be about to fall into US hands as foreign investors continue to raid UK tech.

By Matthew Gooding

Digital identity specialist GB Group (GBG) could be set for a £1.3bn takeover by US private equity fund GTCR as foreign investors continue to raid UK tech companies.

Digital identity provider GBG could be about to get taken over. (Photo by Monster Ztudio/Shutterstock)

The Chicago-based group confirmed overnight that it is interested in acquiring GB Group, which is listed on the London Stock Exchange. “In response to the recent press speculation regarding GB Group plc, GTCR LLC, on behalf of certain of its affiliated funds, confirms that it is currently considering a possible cash offer for the company,” a GTCR statement said.

“There can be no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made. A further announcement will be made as and when appropriate.”

Now that talks have commenced, GTCR has until October 4 to make an offer for GBG.

What does GBG do?

Founded in 1989 and based in Chester, GBG has been providing identity verification services to customers around the world since 2006.

It also offers data and document verification, as well as compliance tools to help businesses spot potential fraud and comply with anti-money laundering and know your customer (KYC) regulations. Customers listed on the company’s website include car maker Volvo, as well as financial services companies such as Revolut and BNP Paribas.

GBG employs some 1,200 people, and posted 2021 revenue of £217m, with an operating profit of £58.8m. It is listed on London’s AIM market.

In response to GCTR’s statement, GBG told shareholders: “The board of GBG notes GTCR’s statement that there can be no certainty that any firm offer will be made for the company, nor as to the terms on which any firm offer might be made. Any proposals received will be evaluated by the board of GBG together with its advisers.”

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GBG’s share price jumped to its highest level since April following GCTR’s statement.

GBG takeover: foreign investors are raiding UK tech

The news of a potential GBG takeover is the latest in a string of potential acquisitions of publicly quoted UK tech companies launched by foreign investors, who are taking advantage of the challenging economic climate and diminishing value of the pound to snare a bargain.

Last month it was revealed cybersecurity vendor Darktrace is in talks with private equity fund Thoma Bravo about an acquisition, while another security company, Avast, is leaving the London Stock Exchange after its takeover by US rival NortonLifeLock was cleared by the government.

Enterprise IT services stalwart Micro Focus last month announced a $6bn acquisition by OpenText, a Canadian cloud software business, and one of the country’s oldest tech firms, engineering software provider Aveva, could be about to fall into French hands if Schneider Electric pursues a plan to acquire its entire share capital. Schneider already owns 59% of Aveva following a reverse takeover in 2017.

Speaking to Tech Monitor yesterday, Russ Shaw, founder of London Tech Advocates, called on new digital secretary Michelle Donelan to work with colleagues in government to protect UK tech assets. “An immediate priority will be working with the Business Minister to develop a world-leading strategy which safeguards UK assets against foreign acquisition,” he said.

Tech Monitor is hosting the Tech Leaders Club on 15 September. Find out more on NSMG.live

Read more: Microsoft faces CMA probe over $69bn Activision Blizzard deal

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