Checkit is considering a £12 million takeover bid for Crimson Tide
- Each Crimson Tide share would be valued at 182.5p under the potential deal
- Checkit believes the partnership offers a “compelling strategic opportunity.”
Offer: Checkit CEO Kit Kyte said the combination is “an obvious and positive strategic move for both companies”
London-listed technology company Checkit is considering making a bid for mobile software developer Crimson Tide worth around £12 million.
Under the potential deal, Crimson Tide investors would receive seven Checkit shares for every share they own and control 30 percent of the expanded company.
Each Crimson Tide share would be valued at 182.5p, a premium of around 12 per cent to the company’s mid-market closing price on Monday.
Checkit believes the partnership provides a “compelling strategic opportunity” to form a larger workflow software provider and would attract more investors due to the potential cost and revenue synergies.
The Cambridge-based group also said the deal would allow it to sell its products to Crimson Tide’s customer base, which includes industries such as logistics, retail, healthcare and transportation.
AIM-listed Crimson Tide is best known for developing the mpro5 app, which allows companies to manage their employees by scheduling and recording tasks.
Its clients included the National Health Service, 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 move for both companies.”
He added: ‘We believe this will position the expanded entity as a market leader in workflow software solutions, leveraging the strengths of both organizations for greater profitability and competitive advantage, while becoming more attractive to existing and potential new investors .’
Checkit noted that it had “long considered” acquiring Crimson Tide and had been attempting to engage in discussions with the Kent-headquartered company for the past four years.
The group said a takeover proposal similar to the one announced Tuesday was “unequivocally rejected” by the Crimson Tide board in January.
It then tried to initiate substantive talks last month but failed. It has therefore now published the terms of a possible offer to ‘facilitate direct discussions with shareholders’.
Checkit added that it would “welcome the opportunity to engage in a dialogue with the Crimson Tide board regarding the benefits of combining the two companies, but will primarily take into account feedback from both groups shareholders’.
Crimson Tide Stock rose 9.5 percent to 178p in early trading Checkit shares fell by 3.85 percent to 25 cents.