99.98% Vote Backs Eleco Takeover Offer at 235 Pence a Share
Key Facts
Eleco shareholders overwhelmingly backed the implementation of the cash acquisition scheme proposed by Avocet Bidco, with the special resolution at the general meeting receiving 52,771,591 votes, equal to 99.98% of votes for or against, against 9,621 votes opposed, while 142,290 votes were withheld. The court and general meetings were held on October 27, 2026, according to results announced by the company. At the court meeting, 52,617,110 shares voted in favour of the scheme, against 7,508 shares opposed, with turnout of 62.36% of shares eligible to vote. Both votes satisfied conditions 2.1 and 2.2 set out in the scheme document. The result marks significant procedural progress for the offer, but does not mean the acquisition is complete or ownership of the company has transferred.
The buyer is offering 235 pence in cash for each Eleco share, a price 74.7% above the closing price of 134.5 pence on September 9, 2026, the last business day before the deal was announced. The offer also exceeds the volume-weighted average trading prices over the periods preceding that date: the three-month average was 126.3 pence, giving the offer a premium of 86.0%; the six-month average was 123.8 pence, a premium of 89.9%. The 12-month average was 132.2 pence, putting the offer premium at 77.7%. The value of the issued and to-be-issued share capital is about £207.6 million on a fully diluted basis. The offer implies an enterprise value of £192.4 million, equivalent to about 20.2 times EBITDA and 31.9 times Cash EBITDA for the year ended December 31, 2025.
The deal is being carried out through a scheme of arrangement requiring court approval under Part 26 of the UK Companies Act 2006, and is intended to acquire the entire issued and to-be-issued share capital of Eleco. The court meeting vote requires a majority in number of shareholders present and voting, representing 75% or more in value of each class of shares voted, alongside approval of the special resolution and then court sanction. Eleco’s directors unanimously recommended that shareholders vote in favour of the scheme, having deemed its terms fair and reasonable on the basis of financial advice from Stephens Europe. The company said the approvals at both meetings satisfied the conditions specified in the scheme document, while the sanction hearing and delivery of a copy of the court order to the registrar of companies remain outstanding. Completion also remains conditional on the satisfaction or waiver of the remaining conditions under the terms of the deal.
The deal comes as Eleco recorded revenue and profit growth in 2025. Revenue rose 20% to £38.8 million, while adjusted EBITDA increased 32% to £10.2 million. Recurring revenue accounted for 81% of the total, while annual recurring revenue rose 29% to £34.3 million. In the first half of 2026, revenue increased 8% to about £19.9 million, and recurring revenue rose 14% to about £16.9 million. Annual recurring revenue was about £35.5 million as of June 30, 2026, according to the deal announcement.
Accel-KKR linked its interest in the company to the potential to support product development, its transition to a software-as-a-service model and the application of artificial intelligence, as well as to provide resources and capital for organic and inorganic growth and international expansion. In the deal announcement, it said it wanted to “support Eleco in continuing product development, transitioning to software as a service, and applying artificial intelligence.” Eleco’s board said the pace of investment required in product innovation, cloud platforms, artificial intelligence and go-to-market capabilities is accelerating. The board said making these investments as an independent company carries greater risks and would take longer to deliver value, and that support after the deal could accelerate them. Avocet Bidco is a company formed for the purpose of the deal and, upon it taking effect, will be wholly indirectly owned by funds managed or advised by Accel-KKR and its affiliates.
The court sanction hearing is expected in or before the first quarter of 2027, while March 10, 2027, has been set as the long-stop date for the scheme to become effective. After sanction is granted, a copy of the court order must be delivered to the registrar of companies and the remaining conditions satisfied before the acquisition takes effect. If the scheme is completed, trading in Eleco shares on AIM will be suspended on the effective date, followed by the cancellation of the company’s listing on the next business day. Cash consideration will be sent to shareholders within 14 days of the effective date, according to the published indicative timetable. Until these steps are completed, shareholder approval remains one stage of the deal and does not constitute its closing.