Shareholders in the Northern Ireland electronics group BCO Technologies are in line for a massive cash windfall after an agreed £100.7 million sterling (€160 million) bid from US group Analog Devices.
Analog is offering 402p sterling for BCO shares which were as low as 38p last year. They began this year at 97p and reached 227p immediately before BCO's May announcement that it was involved in bid talks.
That 402p offer price is a 77 per cent premium on the price in the market before the May announcement and a 91 per cent premium to the average price in the three months before the announcement.
BCO directors Dr Scott Blackstone, Mr James Corkery and Mr Michael O'Connor will receive a combined £14.2 million for their shares. In addition, Dr Blackstone - a founder of BCO - will receive an extra £3.8 million sterling as a result of the change of ownership and its impact on a limited partnership of which he is a beneficiary.
Between the directors and institutional shareholders Analog has received acceptances for more than 72 per cent of BCO shares. The main institutional shareholders are 3i, with 18.9 per cent, Irish group ACT Venture Capital, with 16.2 per cent, the development agency Enterprise Equity, with 13.6 per cent, and Norwich Union, with 2.8 per cent. All of these will make sizeable profits on their investments in BCO, which floated on the AIM and DCM markets in 1997.
Analog, which employs 8,200 people, including 1,200 at an integrated circuits plant in Limerick, is buying BCO for its potential rather than its trading record. Even though it is paying more than £100 million for the company, BCO had losses last year of £2.9 million sterling on sales of just £2.3 million. But in the first half of this year, the firm is thought to have recorded a much-improved performance.
BCO chairman Mr Dermot Simpson said the offer from Analog recognised BCO's expertise. "The directors recognise that long-term relationships with global customers can best be achieved by BCO as part of a leading component supplier which can demonstrate global reach and the ability to provide customers with packaged solutions."
Analog's chief executive Mr Jerald Fishman said: "Analog will bring important expertise, customer relationships and capital investment to BCO's silicon on insulator wafer and silicon micromachine technologies to bring products to market faster."
BCO is involved in the development and production of silicon substrate wafers which allow integrated circuit manufacturers to pack more chips on to a wafer.
The Belfast company has also started customer trials for the manufacture of micro electromechanical systems which can be used in optical switching systems. Analysts said there was a natural link between Analog's manufacturing of micromachine devices and BCO's wafer technology.
The sale of BCO to Analog completes an extraordinary turnaround for the Belfast company which has endured the highs and lows of the stock market since it floated at 140p a share in December 1997, raising £10 million.
Within a year, BCO shares slumped as low as 38p as problems arose with two of the group's customers, resulting in higher losses than had been expected at the time of the flotation. BCO was also affected by significant repair expenditure due to the failure of some key equipment.
In May last year, BCO raised a further £1.6 million in a share placing and open offer which was underwritten by 3i, ACT and Enterprise Equity, while Comdisco, a leasing company, agreed to convert BCO's lease obligations into a 6.8 per cent share. ACT, 3i, Enterprise Equity and Comdisco have now made a massive profit on those investments.
