Shares in software company GB Group (GB:GBG) surged by a huge 24% on Wednesday after it was confirmed as a potential takeover target.
GTCR, a U.S.-based private equity firm, confirmed its interest in the company and plans to make a cash offer.
GB Group, which gained immense popularity during the pandemic, has seen its shares decline by 28% YTD due to weak economic conditions.
The company is the most recent on the list of British tech companies as potential targets by foreign investors. Last month, cybersecurity company Darktrace (GB:DARK) confirmed its talks with U.S.-based private equity firm Thoma Bravo for a takeover.
Expert comments
Canaccord Genuity, which has a Buy rating on the shares, commented, “With GBG ‘in play’ now from an M&A perspective, we could envisage interest from other PE firms as well as industry consolidators with a prior interest in FraudTech assets such as Experian (GB:EXPN) & RELX (GB:REL).”
Alasdair Young, an analyst at Panmure Gordon, said, “We reiterate our view that GBG is one of the UK’s best tech companies, and think the current valuation does not reflect the potential growth/margins of the group.”
What does GB Group do?
GB Group is a leading software company providing intelligence solutions in three sectors location, identity, and fraud protection.
Some of its solutions include data verification, age verification, tracing and investigation, meeting compliance, fraud prevention, etc.
The company operates in the UK, the U.S., and Australia through the sale of its software and a wide range of solutions.
GB Group share price forecast
According to TipRanks’ analyst rating consensus, GB Group stock has a Strong Buy rating, based on three Buy recommendations.
The GBG price target is 868.3p, which shows an increase of 34.2% on the current price. The analyst price target has a high and low forecast of 1,050p and 555p, respectively.
Conclusion
Both companies are yet to announce any further developments on the takeover, and GTCR has one month to make its first offer.
GB Group has requested that shareholders to wait for any further announcements and not to indulge in panic trading.
