Qoria rejects K1’s takeover offer for its growing digital safety empire

Digital safety and student wellbeing solutions specialist Qoria (ASX: QOR) has rejected a takeover bid from K1 Investment Management.

The unsolicited, conditional and non-binding indicative proposal from K1 – a US-based enterprise software investment firm – values Qoria at $0.40 cash per share.

The Qoria board says K1’s indicative proposal significantly undervalues the company and has unanimously rejected it as not being in the best interests of shareholders.

Unanimous support from the Qoria board is amongst a number of conditions named in K1’s offer.

The proposal’s conditions also include the satisfactory completion of due diligence and exclusivity over a 6-week time frame, final approval from K1 and entry into a binding scheme implementation agreement, subject to numerous conditions including FIRB approval.

K1, reportedly with support from Morgan Stanley, says it has entered into call option arrangements with two Qoria shareholders with over 169 million Qoria shares (approximately 14.4% of Qoria’s outstanding shares) that can be exercised in the event that a competing proposal is announced.

‘Opportunistic’ bid

The Qoria board has consulted with its external financial and legal advisers and has described the bid as “opportunistically” timed, due to the company being at a cash profit inflection point and in the middle of its most productive annual sales quarter.

The board has also rejected the offer as it believes K1’s proposal does not reflect Qoria’s position as a global leader in both enterprise and consumer markets in child safety and wellbeing.

Qoria has declared that it will not engage with K1 in respect of the takeover bid and has told shareholders they do not need to take any action in relation to the indicative proposal.

It also stated there is no certainty that a further proposal will be received (from K1 or any other party) and shareholders are cautioned not to place undue reliance upon such a proposal emerging.

Forward-looking focus

Qoria told shareholders it remains focused on progressing its activities to maximise value for all shareholders.

It has appointed RBC Capital Markets and Azure Capital as financial advisers and Thomson Geer as legal adviser.

Formerly known as Family Zone, Qoria recently announced a 31% increase in half-year revenues to $48.5m.

The company also reported that it was preparing for a number of major product releases this year, focusing on using advanced techniques to filter and moderate content.

Major partner

According to K1, it has made more than 215 investments in B2B SaaS.

The company employs more than 125 professionals and has partnered with over 200 enterprise software companies including industry leaders such as accessiBe, Atera, Checkmarx, Complysci, ControlUp, Emburse, Employ, Granicus, HR Acuity, IronScales, Onit, RethinkFirst, Reveal-Brainspace, RFPIO, simPRO, Smarsh, Technomile, XTM International and Zapproved.