Schnitger Corporation

Vero to be taken private

Just last week I blogged about renewed interest in mergers and acquisition in the greater software space and today Vero Software, the UK maker of CAD/CAM solutions for the tooling industry, announces that it has reached agreement to be bought by BV Acquisitions S.à.r.l for the “entire issued and to be issued ordinary share capital of Vero”, according to the press release.

There are legalities involved that I don’t completely understand (and I urge you to read the press release for more information), but the proposal values the deal at approximately £7.19 million, which is (a) a premium of 21% to Vero’s closing price September 15 2009, “the last Business Day prior to the commencement of the Offer Period” and (b) a premium of 43% to the volume weighted average price of the share for the 3 months prior to September 15 2009; but (c) a discount of 3% to the share’s closing on Friday.

Even so, Vero’s board has decided the offer is fair and reasonable and voted unanimously to accept the proposal.

BV Acquisitions was established specifically for the purposes of making this offer and is wholly owned by the Battery Ventures. According to their website, Battery is a 25 year-old venture capital and private equity firm that has invested in companies such as Akamai Technologies, Allegiance Telecom, Infoseek,, MetroPCS, Neoteris, Nextel, and Pixelworks, among many others. A quick scan did not reveal any other engineering software firms, so this would appear to be a new direction for Battery Funds.

Said R. David Tabors, Manager of BV Acquisitions:“We believe that Vero is a great company with strong operational management, but that, given its size, operating environment and international focus, it would fare better as a private company with a simplified and more cost effective corporate structure. Our offer provides Vero Shareholders with a significant premium over the value of their shares prior to the commencement of the Offer Period.”

The deal is expected to close around July 15 2010.

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