According to the industry’s online financial newsletter Marketing Services Financial Intelligence, the Lake deal valued Engine at about £95 million, but nearly half of that value is likely to be absorbed in repaying – with accrued interest – the loan notes held by the previous private equity investor HIG Capital, along with loan notes issued last year to some other shareholders. In addition the £95 million valuation probably allows for the repayment or replacement of bank debt that amounted to about £27 million last December.
According to Marketing Services Financial Intelligence, the value left for all of Engine’s shareholders – including both past and present employees – could be as little as £22 million, or even less when accrued interest and any loan note redemption premiums are taken into account. And continuing employee shareholders will be expected to exchange their Engine shares for shares in the new holding company controlled by Lake without an entitlement to any cash payout.
“Based on the number of shares in issue last January and allowing for known share options yet to be exercised, it seems likely that the former employees will have been offered somewhere in the region of £70 per share”, the publication’