Plasmon in rescue talks with US private equity firm; may lead to takeover
Digital archive specialist Plasmon plc said it is in "preliminary discussions" with an unnamed US-based technology private equity firm which may lead to a takeover worth $25m.
However, most of that would be in the form of an injection of new funds to enable a major restructuring. Shareholders may be offered "not more than 0.25p in cash per share", if a formal offer is forthcoming.
Plasmon's share price shed 0.6p on the news to hit 0.4p, valuing the company at around £0.9m. This compares with a 52 week high of 39.2p, since when the company's trading position has deteriorated.
In early August Plasmon plc said that while its strategy outlined in February was being followed and that several elements were on track or ahead of plan, sales performance in the first quarter was around 20% below expectations.
As a result, the Board reduced its overall sales expectations for the year and initiated a further program of cost reduction and financial restructuring. It also said it needed extra financing.
Since then, the Board has been out marketing, mainly with US investors, with a view to securing additional debt or equity capital.
It said it has not received commitments from potential investors that the Directors consider immediately necessary to fund the business and its ongoing working capital requirements, but it has received the potential takeover approach.
"Given the absence of other financing options, and given the Company's financial position, the Board has concluded that such a sale is the best viable option," the company said.
Plasmon, HQed in Cambridge, has been operating for 20 years and has grown to around 350 employees and annual turnover of $68m.
