Venture Capital fund Molten Ventures has agreed to buy rival Forward Partners in a deal to create a bigger London-based player in the tech funding scene, but at a discount compared to Forward’s closing share price before the deal.
Molten Ventures will offer £41.4 million of its own stock in exchange for Forward’s shares, valuing the firm at 7.3% less than its Friday market cap, or its price for most of the last month, It is above its average over the last three months, however.
The creation of a larger player could be a boost to London’s VC scene, which has struggled to match the firepower of the US.
“Molten is motivated not just by shareholder returns but also by its role as a leader in the European ecosystem for supporting entrepreneurial companies – by making this acquisition, Molten is helping ensure that the portfolio companies will continue to be supported,” Molten said.
Martin Davis, CEO of Molten said: "We are pleased to be announcing the proposed acquisition of Forward Partners, with the unanimous recommendation of the Forward Partners Board. Forward Partners has a balanced and well-capitalised portfolio of 43 high-quality companies and, through combining our considerable resources, experience and networks, we will be even better placed both to support our existing portfolio companies and to capture attractive investment opportunities amid a buyer's market for venture capital.
"The deal would provide Molten with a broader and more diverse pipeline through access to Forward Partners' early-stage deal flow opportunities in fast growing sub-sectors like applied AI and digital marketplaces, and also acts as something of a homecoming for Forward Partners' senior investment team, who are well known to us, and will bring expertise and an investment philosophy which chimes with our own in support of Europe's most ambitious founders."
Commenting on the Acquisition, Nic Brisbourne, CEO of Forward Partners said: "We're pleased to announce news of the offer from Molten today. Over the last ten years, Forward Partners has built a strong and resilient portfolio and, despite the turbulent market, I'm pleased to note that growth remains strong and our companies remain a force for good in the world. This merger will provide the resources, support and time they need to fully realise their potential.
"The Forward Partners board believes this proposal offers good value to our shareholders."
Molten also revealed plans to raise £50 million in a share issue, with up to £25 million of that coming from US funds giant Blackrock, which owns around 70% of Forward Partners. Retail investors will also have the opportunity to take part, via investment platform PrimaryBid.
