Anexo Group (ANX) announced on Wednesday that it has received an approach from DBAY Advisors Limited ("DBAY") regarding a possible cash offer for the entire Company.
The integrated credit hire & legal services group highlighted that the offer was made by a newly incorporated entity jointly controlled by funds managed or advised by DBAY.
On the basis of the DBAY proposal, the board of Anexo said it has granted DBAY due diligence access, with DBAY indicating an offer price of 150p per ordinary share in cash.
Addressing shareholders Anexo said, ‘‘While the structure of the possible offer is not yet confirmed, the status of Alan Sellers, Executive Chairman, and Samantha Moss, Managing Director, Bond Turner, as joint offerors to DBAY's possible offer is under consideration.’
Anexo confirmed this morning that DBAY must, by no later than 21 July 2021, either announce a firm intention to make an offer or that it does not intend to make an offer.
DBAY said it reserves the right to introduce other forms of consideration and/or vary the form and/or mix of the consideration of any offer, as well as the structure of such an offer.
In addition, DBAY also reserves the right to reduce the offer consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by Anexo to its shareholders after today, save for the final 1p dividend per ordinary share unveiled in April.
In recent weeks, Anexo said trading has continued to perform in line with its expectations while the group continues to recruit ‘high quality legal staff’ which it said is in line with its policy of expanding its headcount to drive increased case settlements and cash collection.
In particular, it said cash collections for its legal services division during the first four months of FY21 are in line with management forecasts and 11.8% ahead of those in the FY20 period.
In addition, Anexo told investors that it had achieved its milestone of reaching net cash generation during the year ended 31 December 2020 after a period of ‘continued growth.’
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Anexo achieved its stated milestone of net cash generation throughout FY20, a notable achievement given the disruption experienced over the period as a result of COVID-19.
Both the Company’s business divisions have remained fully operational throughout the 2020 and into 2021 while the Group believes its ongoing investment into its advocacy practice is forming “a solid foundation” for the business to generate new future revenues.
Analysts at Arden have reminded investors Anexo trades on 9.3x 2021 P/E and 6.6x EBITDA, but also only 1.2x P/BV which analysts believe this is too low considering the value stored in the 20,000 case backlog and the investments made in legal services to drive settlements.
Shares in Anexo Group have increased by over 7% in value over the past month.
Anexo is an integrated credit hire & legal services group that provides replacement vehicles and associated legal services to customers who have been involved in a non-fault accident.
In November 2020, the company told investors that the COVID-19 pandemic had led to a number of its competitors withdrawing from the market and, as a result, Anexo had been approached by a number of high-quality introducer garages looking for new partnerships.
The Group said it has leveraged this ‘unprecedented opportunity’ to expand its introducer network; resulting in the number of vehicles on the road during H2 2020 ‘consistently exceeding internal targets’. As at 10 November 2020, road vehicles stood at 1,902.
The company said it plans to work closely with the international Asset Management firm, DBAY, in order to continue the expansion of its Credit Hire and Legal Services divisions.
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