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Empired (ASX:EPD)- Managing Director, Russell Baskerville
Managing Director, Russell Baskerville
Source: Empired
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  • Empired (EPD) hit the top of yesterday’s gainer list after announcing a premium buyout deal with Capgemini Australia
  • The companies have struck a scheme implementation deal under which Capgemini will buy Empired for $1.35 per share
  • This price represents a 64.6 per cent premium to Empired’s last closing price and values the managed service provider at $233 million
  • Empired’s board has unanimously recommended that shareholders approve the deal at an upcoming meeting in October this year
  • Shares in Empired raced towards the Capgemini offer price today and closed 59.15 per cent higher at $1.30 each

Managed IT services specialist Empired (EPD) was yesterday’s top gainer on the market after announcing a premium buyout deal with Capgemini Australia.

Empired told investors today the two companies have entered a scheme implementation agreement for Capgemini to take full control of EPD for $1.35 per share.

This offer price represents a 64.6 per cent premium to Empired’s last closing price of 82 cents per share and values the company at a neat $233 million. The offer price is a 59.9 per cent premium to EPD’s 10-day volume-weighted average price (VWAP) and a 62.1 per cent premium to its 90-day VWAP.

The deal is subject to shareholder approval, which will be sought at a meeting in late October. Empired’s board has unanimously recommended that shareholders approve the deal.

The company said each Empired Director plans to use their voting power to say “yes” to the scheme, as well as CEO Russell Baskerville, who holds a 5.8 per cent stake in the company.

“If implemented, the scheme will provide outstanding career opportunities for our people and have a positive impact for existing and prospective clients by providing them with access to the significant resources, service capabilities and international experience of Capgemini,” Mr Baskerville said.

“Over the past 15 years, Empired has been on a journey to build the most respected digital services company across Australia and New Zealand.

“Our strategy has delivered material growth in shareholder value and we are confident that being part of Capgemini will help to accelerate our combined market position in the coming years.”

Empired Chairman Tom Stianos shared similar sentiments, saying the Capgemini buyout is a “compelling” offer for EPD shareholders.

Empired said Capgemini’s offer its 100-per-cent cash, meaning it would provide shareholders with certainty of value and the opportunity to realise their investment in full.

If all goes according to plan, Empired and Capgemini expect the deal to be finalised and completed by mid-November 2021.

Annual EPD growth

Alongside the news of the planned sale to Capgemini, Empired predicted annual revenue for the 2021 financial year to land between $186 million and $188 million — an increase of around 13 per cent compared to last year’s $165.5 million in annual revenue.

Moreover, EPD said normalised earnings before interest, tax, depreciation and amortisation (EBITDA) should be between $22 million and $23 million for the year compared to last year’s $14.8 million.

This translates to a forecast net cash position of $7.3 million by the end of June 2021.

Shares in Empired raced towards the Capgemini offer price today and closed 59.15 per cent higher at $1.30 each. The company has a $209 million market cap.

EPD by the numbers
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