Workforce software as a service and hardware technology company Damstra Holdings (ASX: DTC) has launched a $58.8 million all scrip takeover bid for fellow workforce SaaS provider Vault Intelligence (ASX: VLT), with Vault chairman Ross Jenkins describing the transaction as an “attractive outcome”.
The companies have entered a scheme implementation deed where Damstra will acquire 100% of Vault, which equates to about 128 million shares and 10.2 million unlisted options.
Shareholders have been offered one Damstra ordinary share for every 2.9 Vault shares held, which implies a value of about $0.464 per ordinary Vault security.
Based on Vault’s closing price on 6 July of $0.34, the takeover values Vault at a 36.5% premium. It is also a 60% premium to Vault’s 30-day volume weighted average price of $0.26.
The duo estimates the takeover values Vault at $58.8 million.
Once merged, Damstra shareholders will own 75% of the final entity.
Vault board endorses transaction
Vault’s board has unanimously recommended the proposal, claiming it was in the best interest of shareholders.
“Vault shareholders will continue to have exposure to the Vault product suite and will become part of a larger company, which provides improved future growth and opportunities,” Mr Jenkins said.
“The board believes the premium pricing is a good measure of where Vault current is as a business.”
“Strategic synergies between Vault and Damstra at a product and customer level will also provide immediate opportunities for the combined group, and, importantly, Vault will be able to access Damstra’s developing overseas sales pipeline,” Mr Jenkins added.
Vault is a SaaS provider of workforce performance and protection technologies, which it delivers via software, mobile and internet of things wearable solutions.
According to Damstra, Vault’s technology gives organisations “significant productivity benefits” while also managing the risk, safety, security and protection of their workers.
The rationale behind the takeover is to create a larger, more diversified, workplace management company with an expanded market and complementary product range.
Once combined, the company would accelerate product development including fever detection, facial recognition, as well as remote, mobile and lone workforce solutions.
Damstra claims this expanded product suite would underpin fast-tracking opportunities in the COVID-19 environment across Australia and New Zealand as well as internationally.
Damstra expects Vault will contribute about $8 million in revenue in FY 2021, with predicted annual cost synergies of $4 million.
Operational synergies are expected to be achieved within 12 months of Damstra completing its takeover of Vault.
Vault managing director David Moylan said the merged entity will be “firmly” placed at the “forefront of emerging technology” for managing and protecting workforces.
Meanwhile, Damstra chairman Johannes Risseeuw claims the merger is part of the company’s strategy to build a “great global technology success story”.