Checkit plc, an augmented workflow and smart sensor automation company for frontline workers, has made a hostile formal takeover approach for Crimson Tide plc.
The potential all-share deal would see seven Checkit shares offered for each Crimson Tide share, valuing Crimson Tide at approximately £12 million and representing a premium of approximately 12% to closing price on 3rd June.
Crimson Tide shareholders would hold approximately 30% of the enlarged group.
Crimson Tide, headquartered in Tunbridge Wells, Kent, is the provider of process management app mpro5, which enables organisations to digitally transform their business and strengthen their workforce by smart mobile working.
Cambridge-based Checkit has hundreds of customers across the globe, including Global Fortune 500 and public health organisations. Its customers are digitising their manual processes through the firm’s customisable workflow software and top-of-the-line Internet of Things sensors, increasingly aided by machine learning and AI.
“The board of directors of Checkit believes that the combination of Crimson Tide and Checkit presents a compelling strategic opportunity to create a scaled workflow software company and furthermore believes that a company of this increased scale would present a more attractive investment opportunity for all shareholders than either business as a standalone entity,” read a Checkit notice to the London Stock Exchange.
In January 2024, Checkit submitted an indicative non-binding proposal to Crimson Tide regarding an all-share merger on terms similar to those proposed in this latest announcement – unequivocally rejected by the latter’s board.
In April, Checkit again contacted the Crimson Tide board, with a view to establishing whether there was any appetite for an informal discussion regarding a possible combination of the two businesses.
“However, it was made clear… that there was no willingness on the part of the Crimson Tide board to enter into any dialogue, even if, as the Checkit board believes, it might have the benefit of enhancing value for Crimson Tide’s shareholders,” said Checkit.
“The Checkit board has noted that the Crimson Tide board has declined to enter into discussions… it has therefore decided to announce the terms of the possible offer to facilitate direct discussions with shareholders of both Crimson Tide and Checkit.”
Checkit CEO Kit Kyte (pictured) added: “Checkit’s stable management team and the Checkit board has a track record of successfully integrating acquired businesses. I look forward to presenting the strategic rationale and benefits of this potential combination to Checkit and Crimson Tide shareholders.”