Consolidator confirms approaches for software house after sale of rival SSP to Hellman & Friedman.
Towergate has received approaches from private investors looking to buy its software house, Open GI.
The business has attracted attention following the sale of its closest rival SSP to private equity house Hellman & Friedman for £198m in July.
The consultant Lexicon Partners is advising Towergate on a possible sale.
Max Carruthers, chairman of Open GI, said Towergate had received a number of approaches.
“We’ve had a few calls about Open GI but these have been referred to Lexicon Partners as that is what it gets paid to do. But we have not had any firm offers yet,” he said.
He suggested that Towergate frequently received approaches to sell stakes in parts of the business.
Carruthers said Towergate had not put Open GI up for sale. “It is one of the best performing businesses in the group with excellent margins.”
“We have had a few calls, but no firm offers yet.
Max Carruthers, Open GI
He refused to rule out a sale, however, saying it could happen for the right price.
Carruthers denied that Towergate had paid too much for Open GI when it bought the company for £276m last September.
“It was absolutely the right price. Look at the terms of the SSP deal,” he said.
Open GI, previously owned by Misys, was purchased by Montagu Private Equity and the management team in March 2006 for
£182m, before the sale to Towergate in 2007.
A sale would not be linked to the downturn, said Carruthers. “Any deal would not be a reflection of the current economic crisis. It would make no difference to us at all.”
Last week Towergate chief executive Andy Homer moved to quash rumours that the broker was in breach of its banking covenants. He confirmed it was renegotiating its covenants, but said: “Towergate has not and is not in breach of its banking covenants. That is a matter of fact.”
