Another bid for Edinburgh software company Craneware is “likely” on the back of weaker trading and a drifting share price, according to a firm of research analysts.
The Canon Mills based firm, which is quoted on the Alternative Investment Market, does all of its business in the US where it supplies administrative software to the healthcare market.
Bain Capital walked away from a takeover offer a year ago after the Craneware board rejected its proposed deal at 2650p per share, valuing the company at £940 million.
Craneware said Bain’s offer was at “a price which the board believes fundamentally undervalues Craneware and its prospects”. Craneware subsequently raised its profits guidance and hiked its dividend.
However, in recent months the company’s value has drifted, with its shares closing tonight at 1138p, giving the firm a market capitalisation of just £389m, less than half Bain’s offer price.
In a trading update last week it guided to what Panmure Liberum analysts described as a “material miss” for FY26E, driven by delays in revenue from a key programme. FY26E numbers are now expected to be broadly flat on 2025.
“We lower our estimates and target price to reflect this,” said the analysts in a newly-published note. “A key question is the extent these ‘lost’ revenues flow into FY27E.
“We retain a Buy rating with a new 2580p target. Post a rejected proposal from Bain Capital, last June, at around 2650p, we believe another bid is likely.”
It was not clear whether Panmure Liberum expects any new bid to come from Bain or another interested party.
After withdrawing its interest last year, Bain said it “may revive its interest, with the agreement of the Craneware board, if there is a rival offer”.
Craneware was co-founded by Keith Neilson, CEO, and Gordon Craig in 1999. Mr Neilson is one of the longest-serving CEOs of a publicly-quoted company.
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