AIM market takeovers boom plus 3 potential targets

It is well known that there has been a significant exodus of companies from AIM during recent years, but it is underappreciated how many of these have been the subject of takeovers.

Last year, the largest number of companies that left AIM did so by choice, believing it was not for them anymore. However, 28 of the departures were because of takeovers, which is more than one-third of the 84 companies that left in 2025.

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That does not include reverse takeovers, although it does include oil and gas explorer Challenger Energy Group where the acquirer Sintana Energy Inc subsequently joined AIM in December.  

Some of the bids have been for companies that have been hit by poor trading. Others have gone through troubled times and have fixed their problems. Buildings and utilities maintenance firm Kinovo had finally sorted out the work it had guaranteed when it sold a former subsidiary and was becoming significantly cash generative. Former AIM company Sureserve, which itself was bought by private equity buyer Cap10 Partners, spotted the opportunity before the share price recovery gained momentum. It pounced with a bid of 87.5p/share in cash, which valued Kinovo at £56.4 million.

The weak AIM market has attracted international and private equity buyers that can spot bargains. This includes some of the largest AIM companies. This has further contributed to the decline in the market capitalisation of AIM, on top of the general poor share price performance.

Learning Technologies Group recommended a 100p/share cash bid from technology investor General Atlantic that valued the e-learning services company at £802.4 million. That is nearly 20 times the value of the business when it reversed into a shell in 2013.

Entities that are part of the TA Fund XV offered 2,450p/share for software company FD Technologies,valuing it at £570 million. This followed a £120 million tender offer at 1,950p/share.

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In the first quarter of 2026, there were two companies that left AIM after being taken over. WH Ireland had sold its broking business and the proposed sale of its wealth management division fell through. That sparked a bid from fellow AIM company Jersey-based asset manager Team, which offered 0.195 of a share for each WH Ireland share.

Grocery distributor Kitwave Group recommended a 295p/share cash bid from OEP Partners, valuing it at £251 million. Kitwave has been a successful consolidator in its sector, and it had built up a significant level of debt. Trading had been tougher and the founder had retired. OEP saw this as an opportunity.

Singer estimated the prospective 2025-26 earnings multiple was 10 at the bid price, and the broker believed that this was too low. It pointed out that food wholesaler Booker had been acquired at 21 times earnings, although that was many years before and it was much larger.

The analyst believed that Kitwave was worth nearer 390p/share. That is around the all-time high. However, a subsequent poor trading statement made it easier to go ahead and succeed at the original bid level.

Some bids that were originally recommended have been nudged up following pushback from institutional shareholders.

Last year, Fortress Investment took advantage of the depressed share prices of pubs and bars operators to bid for Bristol-based bars operator Loungers. The initial recommended 310p/share offer was at a significant premium to the previous market price and was higher than the peak share price in 2021.

However, Singer again calculated that the bid was too low and argued that 375p/share would be a fairer value. In this case, the bid was subsequently raised to 325p/share, which valued Loungers at £367 million.

Generally, bids do go ahead if they are recommended, whether or not the bid is increased. After many months of delays due to some shareholder pushback and awaiting government approvals, document management and government software provider IDOX has been acquired by the Long Path Opportunities Fund. The bid had to be switched from a scheme of arrangement to an outright bid so that gaining over 50% acceptances would be enough for it to be completed.

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Technology companies that have reached a point where they are about to push on can be targets. This means that AIM loses these technology companies relatively early in their life when all the past investment is starting to pay off.

Germany-based Vossloh launched a recommended bid for Cordel Group. This is an example of a large company swooping on a small technology firm that has developed its product and has developed a market. The risk has been reduced, and it is a good time to take on the business and use the greater financial backing to accelerate growth.

The 12.4p/share cash offer values the transport infrastructure analytics technology provider at £29 million. Vossloh is involved in the rail sector and wants to provide digital services as well as move into the US market. Cordel and Vossloh are already working together in Europe.

It is a shame that another growing technology company is being taken out by a bidder. Cordel’s progress has been slower than predicted in the past, but it was gaining momentum with contracts in Europe and North America.

Potential takeover targets

There are plenty of other potential takeover targets. Woundcare company Advanced Medical Solutions Group has been in bid talks a couple of times in recent years but has been unable to agree a deal. Checkit and Team Internet Group are undergoing strategic reviews that could lead to bids for each company, although Team Internet Group may sell its domain names business, which is the most attractive part of the company, and continue with the online marketing operations.

There are other companies that are at a point where they could be an attractive bid target. Here are three companies where a bidder could take advantage of their potential recovery/growth, although there is no certainty it will happen.

Media analysis company Ebiquityreported a slump in 2025 pre-tax profit from £6.5 million to £1.1 million, but profit is expected to recover to £2.6 million this year even without a recovery in the advertising market. The company is cash generative and net debt was reduced to £13.1 million.

The share price has slumped to a low of 10.75p, which values Ebiquity at £14.9 million. The prospective multiple is relatively high at 23. That could fall to less than 15 next year.

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Ebiquity provides data and analysis to advertisers to help them spend money effectively. It would be an attractive target for a large media company, which could cut out the quoted company overheads. This would make Ebiquity more profitable even before a recovery in the ad market.

Translation software and services provider RWS Holdings is an example of a company that has a strong track record, but there were some problems in recent years with declining revenues. Trading, though, is improving but it is not yet fully reflected in the share price.

Interim revenues will be around 5% higher at £360 million, with organic constant currency growth of 7%. Net debt was £33 million at the end of March 2026.

Underlying full year pre-tax profit should be £68.2 million after cost savings. At 106p, the prospective multiple is eight and the forecast yield is 7%.

Founder Andrew Brode, who is 86 years old, still owns nearly one-quarter of RWS. It would be important for any bidder to get his backing, but if they did, they would have a strong base from which to acquire the rest of RWS.

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Driver safety technology developer Seeing Machines Ltd says automotive volumes more than doubled in the third quarter compared with the previous quarter.

Royalty revenues for the three months were greater than for the whole of the first half. Sales of Guardian aftermarket products are also growing. There should be a positive EBITDA in the second half.

Seeing Machines has been consistently loss making. A pre-tax profit of $7.1 million (£5.3 million) is forecast for 2026-27 and now that the company is covering overheads the profit should accelerate. In 2027-28, pre-tax profit could reach $18.6 million. Seeing Machines could also move into a net cash position by the end of 2028.

Now that Seeing Machines has proven the demand for its technology in the automotive industry, it would be an attractive add-on for an automotive parts and software provider to large car companies.

Mitsubishi Electric Mobility already owns 20.4% of the company, so it is best placed to be a bidder. The bulk of the investment was made at 4.09p/share. The current share price is 4.77p/share. The close relationship with Mitsubishi Electric Mobility could make it more difficult for a rival to make an offer, though. 

Andrew Hore is a freelance contributor and not a direct employee of interactive investor.