Peach Holdings has agreed to be taken private less than six months after the Florida-based speciality finance provider listed its shares on the Alternative Investment Market.
The company, chaired by Dermot Smurfit, a scion of the Irish packaging empire, unveiled an agreed £404m takeover by Orchard Acquisition Company yesterday.
The newly formed investment group is led by DLJ Merchant Banking, part of Credit Suisse, and includes members of Peach's management and private equity backing from Greenhill Capital Partners and LLR Equity Partners.
The overall price paid by Orchard includes a 3.5p dividend per Peach share, a 25 per cent premium to its flotation price. Yesterday, they advanced 3p to 374p.
Peach buys "high-quality deferred payment obligations", such as annuity payments, sweepstake awards, life insurance policies and settlements from the tobacco industry. It offers those expecting future payments an upfront lump sum in return for future income.
The company also signalled that the securitisation of its life settlements, slated for completion in the last three months of this year, may now take place in 2007.
Last month, Peach confirmed widespread talk that it had been approached about a possible offer.
Should the deal with Orchard fall through, Peach will be liable to pay the investment group a break fee of $21.5m (£11.5m) plus expenses.
This is the latest of a series of recent deals involving the multimillionaire Dr Smurfit. Last year, he and his brothers Michael and Alan spent more than £20m to buy the Finnish paper company, Savon Sellu. In August, it emerged he had led another consortium that bought a paper mill factory, also in Finland.Reuse content