The deal had not been in the pipeline for more than three months before the announcement today (18 July), said Ei Group chief executive Simon Townsend.
“Literally, it’s been two months from start to finish,” he told MA. “Stonegate made an initial approach to us, which was unsolicited. In May, we went through a process of rejections and decisions until we felt the price was something that would allow us to engage with the shareholders.”
While both parties have agreed a price, the deal is still to be voted on by Ei Group’s shareholders, Townsend said, which is likely to take place in September.
Transfer will be made in early 2020
Following the vote, the deal must then be approved by various competition and market authorities, after which it is hoped the transfer will be made in early 2020.
“At that point, the whole of Ei Group’s board will stand aside,” explained Townsend. “Stonegate has been positive about our trade and people and teams that have brought the business to where it is today.
Stonegate and Ei Group deal
“They [Stonegate] are bringing to the party lots of experience and they have said in an announcement that they will merge and integrate the businesses.
“What they bring to [the deal] is UK-wide coverage of local market places all under managed formats and that gives them a consumer insight of local market places, which we have also used to bring the business where it is today.”
There will also be investment in the portfolio, as already outlined by Stonegate boss Simon Longbottom in an interview with MA shortly after the sale announcement this morning (Thursday 18 July).
Release funds to invest
Longbottom said Stonegate, once the deal has gone through, would look to release funds to invest in parts of the business.
“They will bring investment,” Townsend continued. “They have demonstrated their intention to do that.”
As for Townsend’s future, he said: “For the immediate future, my entire focus is to deliver this entire transaction.
“At that point, when completion occurs, the whole board will stand aside,” Townsend added, but did not comment on his future with the company.