Identity data intelligence platform provider GB Group (GBG:AIM) has become the latest UK technology company to catch the eye of potential buyers after confirming talks with Chicago-based private equity firm GTCR.

No financials details have been disclosed so far although we do know that the discussions surround a possible cash offer. GB’s shares rallied hard as the news hit the screens of investors, sending the stock up from 435p to 647p.

Conversely, private equity firm Thoma Bravo has walked away from a deal for cybersecurity firm Darktrace (DARK), sending its stock plunging.

Investor buying had sent Darktrace stock surging from 377p to 540p when talks investigating a deal to take the firm private where revealed last month. Yet those gains were washed away after Thoma Bravo ended talks. Darktrace shares fell 32% to 350p, although the price has edged up to 388p since.

Interestingly, the Darktrace news was announced alongside full year to 30 June 2022 figures that saw the company chalk-up its first ever annual net profit of $1.46 million, versus the previous year’s $146 million loss. This was a strong performance driven by new customer wins that says a lot about demand for Darktrace’s artificial intelligence cybersecurity tools.

The company added more than 500 clients in the fourth quarter bringing its full-year total to over 7,400, up 32%. It is also improving its ARR (annual recurring revenue) retention rate, from 103.1% to 105.5%. Growth came from all angles, with its biggest US market up 34% to $143 million, albeit with a $3.8 million revenue recognition adjustment.

Back to GB, and analysts believe an offer would have to come in above 700p if it is to have any chance of turning heads at board and         shareholder level.

Analysts at Megabuyte calculate GB’s EV/EBITDA (enterprise value to earnings before interest, tax, depreciation and amortisation) at around 22 times once the news broke, versus about 17.5 times before.

‘There is precedence for a high-20 times offer,’ said Megabuyte’s Indraneel Arampatta, who pointed to compliance software supplier Ideagen (IDEA:AIM), which is currently being courted by Hg at around 28.7-times EV/EBITDA.

The interest comes after a good set of 2022 results (to 31 March), in which GB grew adjusted operating profit by 2% to £58.8 million on revenue up 11% to £242 million. The company also anticipated a strong 2023, with profits anticipated up 22% to £72 million on revenue up a similar amount to £297 million.

Analysts at Peel Hunt believe a trade buyer from the credit agency industry could easily emerge to up the ante. This could include the UK’s Experian (EXPN) or TransUnion (TRU:NYSE) of the US.

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