Checkit, the augmented workflow and smart sensor automation firm, has made a formal £12 million all-share offer to acquire rival Crimson Tide. T
he unsolicited approach offers Crimson Tide shareholders 7 new Checkit shares for every Crimson Tide share they hold.
The 182p per share offer price represents a 12% premium to Crimson Tide’s closing share price on 3rd June and may be difficult for Crimson Tide’s shareholders to stomach, given Crimson Tide traded significantly higher than the offer price for long periods during 2023.
If successful, existing Crimson Tide investors would own around 30% of the enlarged Checkit group.
Checkit believes combining the two companies creates a compelling scaled player in workflow software with significant revenue and cost synergy potential. A larger entity could attract broader investment and higher valuation multiples than the current standalone businesses.
The product fit between Checkit’s workflow automation and Crimson Tide’s mobility solutions is complementary. An integrated offering spanning sensors, software and services would benefit both customer bases.
Crimson Tide’s logistics, healthcare and retail verticals are highly relevant for Checkit. Leveraging its expertise in areas like IoT sensors could provide Crimson Tide a edge as it aims to expand its mobility roadmap.
Substantial cross-selling opportunities have been identified, particularly into Checkit’s established US market footprint. The combined entity would pursue an aggressive expansion strategy across multiple sectors worldwide.
Checkit stated the all-share bid is “undoubtedly in the best interest” of both companies’ investors. However, the Crimson Tide board has yet to formally respond to the unsolicited approach.
