Less than two weeks into 2025 we’ve had our first defection from AIM in the form of Alliance Pharma. A £350 million agreed bid from its largest shareholder, the Isle of Man fund manager BAY Advisors, will see the specialty drugs company taken private.
In retreating from the junior market after more than 20 years, Alliance, led by Nick Sedgwick, hopes it can kick-start is buy-and-build growth strategy that has been stalled by a lack of access to growth capital. As you’ll read later this is a recurring issue – and one financiers, investors and policymakers are struggling to address.
In a statement announcing the go-private transaction, the company said: 'Acquisitions have…been an important part of Alliance's development and the current restrictive funding environment, leverage levels and a number of operational challenges have meant that Alliance has not been able to pursue acquisition opportunities over the past 24 months.'.
In short, the lowly valuation of the stock has prevented the group from raising cash through share placings, essentially putting on hold any expansion plans it harboured. 'The Alliance board believes that access to private capital and DBAY's support will allow it to return to its buy-and-build strategy more quickly than if it remained on the public market,' the company said.
Goods: Alliance Pharma specialises in consumer healthcare categories with few major competitors, like eczema, scar care and eye health. There were another of other reasons cited for its acceptance of DBAY’s offer, which while offering a significant premium to the pre-bid price, was still almost 50 per cent below the April 2022 high for the stock.
