Accel-KKR has agreed a recommended £207.6m (€243.3m) all-cash takeover of Eleco, a deal that hands the AIM-listed construction software group's Irish operations, technology and customer base to a US private equity buyer for the first time.

Eleco, founded in 1895 and listed on the London Stock Exchange since the start of the Second World War, is a construction technology group operating through brands including Elecosoft, BestOutcome and PEMAC, with its Irish PEMAC unit based in Cork and Dublin serving more than 100 blue-chip regulated-industry clients.

Accel-KKR, headquartered in Menlo Park, California, is a private equity firm founded in 2000 that has raised more than $23bn (€20.8bn) to invest in mid-market software and technology-enabled services businesses.

Shareholders will receive 235p per share, a 74.7% premium to Eleco's undisturbed closing price, valuing the company at £207.6m (€243.3m), or 20.2 times 2025 EBITDA; the deal is a Part 26 scheme of arrangement requiring 75% shareholder approval, expected to complete in early 2027.

Eleco's board was advised by Stephens; investors holding 45.2% of shares, including Allen & Co and the founding Ketteley family, have pledged support.

Eleco's own board said its shares did not fully reflect the company's shift toward recurring software revenue, making this as much a story about funding the next phase of growth as it is about an exit.

Competing as a standalone AIM-listed company would require years of heavy investment in cloud platforms and artificial intelligence, the board said, a burden that has become common across small-cap software companies weighing public listing against private ownership.

The 20.2 times EBITDA multiple sits well above typical AIM software valuations, reflecting how thin the pool of quoted construction technology assets has become as private equity buyers target recurring-revenue businesses; Accel-KKR has said it will back Eleco's SaaS transition, AI feature rollout and further bolt-on acquisitions in construction technology.

For the sector, private ownership is becoming the default route to funding cloud and AI investment that public markets, particularly AIM, are increasingly reluctant to underwrite, and further consolidation of niche construction technology vendors, spanning scheduling, maintenance management and portfolio management, looks likely as private equity buyers use platforms like Eleco to acquire smaller specialists.

Source: PE Hub / City AM / Proactive Investors