Veritas Capital agrees £1.65bn takeover of Bodycote, topping CVC

What happened

On 1 September 2026, Bodycote's board recommended a cash offer from Vulcan Alpha Bidco, owned by funds managed by New York-based Veritas Capital. Shareholders will receive 940p a share, made up of 932.8p in cash and a 7.2p interim dividend. That values Bodycote's equity at about £1,652m on a fully diluted basis, and its enterprise value, including debt, at about £1,852m.

Apollo's approach was announced on 22 May, and Apollo later walked away from its £1.52bn proposal. On 5 August Bodycote disclosed separate proposals from CVC at up to 915p a share and from Veritas at up to 914p. Veritas then raised its price to 940p.

Bodycote's shares rose as much as 4.8% to 957p on 1 September, above the offer price. CVC said the same day that it was considering its position and advised shareholders to take no action. The deal is structured as a court-sanctioned scheme of arrangement and is expected to take effect in the first quarter of 2027.

Who advised whom

Lazard was sole financial adviser to Veritas and its bidding company. Gibson Dunn was Veritas's legal adviser.

Bodycote used Barclays and Goldman Sachs as joint lead financial advisers, Jefferies as financial adviser, and Gleacher Shacklock as financial adviser and Rule 3 adviser. Barclays and Jefferies are its joint corporate brokers, and Herbert Smith Freehills Kramer was its legal adviser.

Rule 3 of the Takeover Code requires a target's board to obtain competent independent advice on whether an offer's financial terms are fair and reasonable. Advised by Barclays, Goldman Sachs and Gleacher Shacklock, Bodycote's directors consider the terms fair and reasonable.

The bidder has long-term debt commitments from Bank of America, Deutsche Bank, UBS and Citi.

Why the buyer paid

Bodycote says it is the world's largest provider of heat treatment and specialist thermal processing services, with about 130 facilities in 22 countries and about 4,000 employees. In 2025 it reported revenue of £727.1m and adjusted EBITDA of £184.7m.

Veritas, which manages about $54bn, described Bodycote as a provider of “metal technology solutions”. It has made 15 platform acquisitions in aerospace and defence, and its portfolio includes the aero-engine technology firm Chromalloy. Reuters reported that analysts point to a “UK discount”, with British shares trading at lower multiples than US and European peers.

Bodycote's board said the offer gives shareholders “immediate and certain cash value”, citing “continued weakness” in its automotive and industrial end markets.

The one number that explains it

37.5%. That is the premium of the 940p offer value to Bodycote's volume-weighted average share price of 683.4p in the three months to 21 May 2026, the undisturbed period before Apollo's approach was announced. It is the extra value the board weighed against the risks of delivering its own plan. Measured against the 750.2p closing price on 4 August, the last business day before the offer period began, the premium is 25.3%.

How to say it in an interview

Veritas Capital agreed to buy Bodycote for 940p a share, about £1.65bn for the equity or £1.85bn including debt, a 37.5% premium to the undisturbed share price and above CVC's 915p proposal. Veritas adds a heat treatment business with aerospace and defence exposure to a portfolio built on 15 platform deals in that sector, while Bodycote's board chose certain cash over the risk of weak automotive and industrial markets.