Checkit eyes £12m takeover bid for Crimson Tide

London-listed technology company Checkit is considering making an offer for mobile software developer Crimson Tide worth around £12million.

Under the possible deal, Crimson Tide investors would receive seven Checkit shares for each share they hold and control 30 per cent of the enlarged business.

Each Crimson Tide share would be valued at 182.5p, a premium of about 12 per cent to the firm’s middle market closing price on Monday.

Checkit believes the tie-up presents a ‘compelling strategic opportunity’ to form a larger workflow software provider and would attract more investors due to the potential cost and turnover synergies.

The Cambridge-based group also said the deal would enable it to sell its products to Crimson Tide’s customer base, which covers sectors like 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 customers have included the National Health Service, supermarket chains Tesco and Morrisons, and train operators Chiltern Railway and MTR Elizabeth Line.

Kit Kyte, chief executive 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 organisations for enhanced profitability and competitive advantage whilst being more attractive to existing and potential new investors.’

Checkit noted it had for a ‘long time considered’ buying Crimson Tide and tried to engage in talks with the Kent-headquartered firm over the past four years.

The group said that a takeover proposal similar to the one announced on Tuesday was ‘unequivocally rejected’ by Crimson Tide’s board in January.

It then tried but failed to initiate substantive talks last month, so it has 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 dialogue with the Crimson Tide board on the merits of a combination of the two businesses but will be mindful first and foremost of feedback from both sets of shareholders’.

Crimson Tide shares climbed 9.5 per cent to 178p in early trading, while Checkit shares fell by 3.85 per cent to 25p.