Gamma agrees £1bn takeover by private equity firm Epiris

 Gamma Communications has agreed to a £1.02 billion takeover by private equity firm Epiris, ending months of speculation over the company’s future ownership.

£11.20-a-share deal values B2B communications provider at £1.02bn  but Waterland still has until September 18 to make a rival bid

Gamma’s board has unanimously recommended a cash offer from Bradbury Bidco, a company controlled by funds managed by London-based Epiris.

Shareholders will receive £11.20 for each Gamma share, valuing the company’s fully diluted share capital at approximately £1.015 billion and giving it an enterprise value of around £1.079 billion. 

The price represents a 53 per cent premium to Gamma’s £7.32 share price on April 7, the final trading day before the company entered an offer period.

Major UK channel player

Gamma is one of the UK’s largest B2B communications providers, supplying cloud communications, connectivity and managed services.

Its extensive network of channel partners connects technology vendors with hundreds of thousands of SMEs, while Gamma also sells directly to larger businesses and the public sector.

The company employs more than 2,000 people and has expanded beyond its UK base, particularly into Germany.

Epiris said Gamma’s channel relationships were among the attractions of the business and believes further investment in products, services and AI could accelerate its growth.

The private equity firm said taking Gamma private would provide greater flexibility to invest for the longer term.

Bidding battle

Gamma put itself effectively into play in April after receiving approaches from several potential buyers.

The company subsequently held talks with a number of interested parties and considered proposals for both the entire business and individual parts of the group.

Gamma said its board rejected proposals it believed failed to reflect the value and prospects of the company before concluding the Epiris offer represented the best combination of value and certainty for shareholders. (i

However, the takeover battle may not quite be over.

Waterland Private Equity, which has been considering a competing proposal involving UK communications provider Giacom, has until September 18 to make a firm offer or walk away. 

Gamma positions

Takeover disclosures published today also reveal significant institutional positions in Gamma.

Liontrust Asset Management disclosed an interest in 7.32 million Gamma shares, representing 8.21 per cent of the company. The fund manager also disclosed selling 23,934 shares at £11.68791 each.

Man Group disclosed interests representing 1.9 per cent, comprising 182,730 shares and cash-settled derivatives covering around 1.52 million shares.

The filings were triggered by Takeover Code rules requiring investors with interests of one per cent or more in relevant securities to disclose their positions during an offer period.

What happens next?

The acquisition is planned through a court-sanctioned scheme of arrangement and requires approval from Gamma shareholders as well as regulatory clearances.

Subject to those conditions, Gamma and Epiris expect the transaction to complete during the first half of 2027. 

For Gamma’s UK channel partners, attention will now turn to what private equity ownership means for the company’s strategy and whether Epiris accelerates investment, acquisitions and the development of Gamma’s channel proposition.