- Each Crimson Tide share would be valued at 182.5 pence under the potential deal.
- Checkit believes the partnership presents a “compelling strategic opportunity”
Offer: Kit Kyte, Checkit’s chief executive, said the combination “is an obvious and positive strategic step for both companies.”
London-listed technology company Checkit is considering making a bid for mobile software developer Crimson Tide worth around £12m.
Under the potential deal, Crimson Tide investors would receive seven shares of Checkit for every share they own and would control 30 percent of the expanded business.
Each Crimson Tide share would be valued at 182.5 pence, a premium of around 12 per cent to the company’s mid-market closing price on Monday.
Checkit believes the alliance presents a “compelling strategic opportunity” to form a larger workflow software provider and would attract more investors due to potential cost and billing synergies.
The Cambridge-based group also said the deal would allow it to sell its products to Crimson Tide’s customer base, which covers sectors such as logistics, retail, healthcare and transportation.
AIM-listed Crimson Tide is best known for developing the mpro5 app, which helps businesses manage their employees by scheduling and recording tasks.
Its clients include the NHS, supermarket chains Tesco and Morrisons, and train operators Chiltern Railway and MTR Elizabeth Line.
Kit Kyte, CEO of Checkit, said the combination “is an obvious and positive strategic step for both companies.”
He added: “We believe it will position the enlarged entity as a market leader in workflow software solutions, leveraging the strengths of both organizations to improve profitability and competitive advantage, while being more attractive to existing investors.” and potentials”.
Checkit said it had “long considered” purchasing Crimson Tide and had been trying to engage in talks with the Kent-based company for the past four years.
The group said an acquisition proposal similar to the one announced Tuesday was “unequivocally rejected” by the Crimson Tide board of directors in January.
It then tried but failed to start substantive talks last month, so it has now published the terms of a possible offer to “facilitate direct discussions with shareholders”.
Checkit added that he would “welcome the opportunity to engage in dialogue with Crimson Tide’s board of directors about the merits of a combination of the two businesses, but will take into account, first and foremost, feedback from both sets of shareholders.”
Crimson Tide Actions rose 9.5 percent to 178 pence in early trading, while checkit actions fell 3.85 per cent to 25p.
