Tech firm Checkit has submitted a formal proposal to acquire smaller AIM-listed rival Crimson Tide for around £12m after years of trying to engage in talks.
The Cambridge-based firm said its all-share takeover bid valued Crimson at 182p per share – a premium of around 12 per cent to its middle market closing price at the close on Monday.
The company said its proposal would give Crimson shareholders roughly 30 per cent of the combined business.
Checkit said it had to announce a formal approach to kickstart direct talks with both firms’ shareholders after multiple attempts to engage in discussions with Crimson over the last four years.
The firm said Crimson rejected a non-binding proposal from Checkit in January and did not engage in talks when it made another approach in April. As of Monday’s close, Crimson’s shares had fallen 43 per cent over the past 12 months.
Under UK takeover rules, Checkit has until 5pm on 2 July to make a firm offer for Crimson or walk away.
Checkit provides customers with a workflow management software platform that delivers remote monitoring and automated surveillance to manage their teams of so-called deskless workers.
The firm said in February that its path to profitability was moving faster than expected after it halved its annual loss to £3.4m in 2023.
Crimson, founded in 1996, owns mpro5, a field service management software platform used in sectors including facilities management, retail, rail and hospitality.
Kit Kyte, Checkit’s chief executive, said on a possible tie-up: “We believe it will position the enlarged entity as a market leader in workflow software solutions, leveraging the strengths of both organisations for enhanced profitability and competitive advantage whilst being more attractive to existing and potential new investors.
“Most importantly, the Checkit Board believes that the combination of the two businesses has the potential to deliver value for both sets of shareholders.”
“Checkit’s stable management team and the Checkit Board has a track record of successfully integrating acquired businesses,” he continued.