Gamma Communications has agreed to a £1.079bn takeover offer from the London-based private equity firm, Epiris.

The recommended cash offer for the FTSE 250 British telecoms firm comprises an offer of £11.20 per Gamma share, representing a 53% premium on its closing share price on 7 April, which is the last prior day to the commencement of an offer period.

Epiris said it believes Gamma is a "leading European provider of business-critical communication technology", after it expanded its business beyond the UK and launched successful new products.

It added that it believes that it is well positioned to accelerate the telecoms firm’s transformation and development as a private company and deliver its next phase of growth.

The private equity firm stated that through increased investments and a renewed strategic focus on innovation underpinned by greater AI adoption, there are significant opportunities for Gamma to accelerate its growth.

Gamma’s directors intend to recommend unanimously that its shareholders vote or procure votes in favour of the scheme.

Partner at Epiris, Ian Wood, stated: "Gamma is a complex and highly resilient business, with strong market positions in the UK and Germany and a growing presence across Europe. Epiris has followed the company, and the wider telecoms sector, closely for a number of years, and we are excited to work with Gamma's management team to continue its growth as a private company.

"We believe that the acquisition represents a compelling and deliverable offer which provides Gamma Shareholders with certainty of value. We are delighted to have the support of HarbourVest and Limewood Capital as co-investors in this transaction."

Investment director at AJ Bell, Russ Mould, concluded: "After a lengthy pursuit, another private equity buyer in Epiris secured the backing of the board at Gamma for a takeover at a 53% premium to the undisturbed share price.

"While some investors may be toasting the pay-off they receive from the wave of M&A, the longer-term implications are potentially bleak. These deals mean a further dilution of the breadth and quality of a UK market which is struggling to attract new companies to replace the ones which are being acquired."

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