Takeover offers continue to roll in for TAMIM.

This time around it’s Cirrus Networks Holdings Limited (ASX: CNW) with an offer from Atturra Limited (ASX: ATA)  to acquire 100% of Cirrus’ shares through a Scheme of Arrangement for a price of 5.3 cents per Cirrus share. The move is yet another sign of the increased merger & acquisition activity in the small cap space on the ASX. You can read up on our coverage of the previous takeover offers within the portfolio for Healthia (ASX: HLA) here and Symbio (ASX: SYM) here.

Cirrus Networks announced on Monday that it is entering into a Scheme Implementation Deed with Atturra.

This agreement outlines Atturra’s intention to acquire Cirrus Networks entirely, valuing Cirrus  at around $49 million. The proposed Scheme will deliver Cirrus shareholders a total consideration of 5.3 cents per share. This consideration will be a blend of approximately 75% cash and 25% Atturra shares. Notably, the deal represents an attractive 29.3% premium above the previous closing price of 4.1 cents on 8 September. Furthermore, it represents a significant 25.5% premium over the 30-day volume weighted average price.

Shareholders will have four options to receive their consideration:

1. 75% cash consideration and 25% share consideration, equating to 3.98 cents cash and 0.0150 Atturra shares for each 1 Cirrus share held (Default Consideration);
2. 100% cash consideration, equating to 5.3 cents cash per Cirrus share held (Cash Consideration)
3. 100% share consideration, equating to 0.0601 Atturra shares for each 1 Cirrus share held (Share Consideration); or​
4. ​50% cash consideration and 50% share consideration, equating to 2.65 cents cash and 0.0301 Atturra shares for each 1 Cirrus share held (Split Consideration).

The Cirrus board is unanimously recommending the deal with all directors intending to vote in favour of the scheme.

The CEO of Cirrus, Chris McLaughlin commented:

Interestingly Microequities Asset Management Group Limited (ASX: MAM) took up an even larger position in Cirrus yesterday. The move boosts its voting power to 11.56% in a potential move to gain greater influence at the negotiation table.

Cirrus Networks Holdings Limited is an innovative Managed Services and IT Solutions provider, operates nationally, translating organisations’ needs into valuable technological outcomes.

The Company offers flexible, cost-effective solutions, delivering tangible operational benefits. Cirrus boasts a wide-ranging portfolio covering Networks, Data Center, Cloud, Storage, Business Continuity, Cybersecurity, Workspace, AI, Unified Communications, and IT Services. Cirrus has rapidly attracted blue-chip clients across industries, government, and non-profits, delivering excellent service, and embracing a holistic approach. Founded and headquartered in Perth, Cirrus expanded its footprint into Canberra and Melbourne through strategic acquisitions. Positioned at the forefront of megatrends like AI and digitisation, Cirrus Networks Holdings Limited stands as a burgeoning IT solutions provider with a bright outlook in the equity market

Cirrus reported strong FY23 results in early August no doubt adding to its appeal.

The company achieved new records across various key metrics. Full-year revenue reached $112 million, marking an 8% increase compared to FY22. Gross margin also saw substantial growth, reaching $16 million, a 14% improvement from the previous fiscal year.

Notably, adjusted EBITDA grew to $4.8 million, exhibiting a remarkable 127% increase of $2.7 million compared to FY22. The company generated $5.4 million in operating cash flow for the year, while maintaining a robust, debt-free balance sheet. Cirrus had a net cash position of $13.9 million as of June 30th.

Atturra is an ASX-listed technology business providing a range of enterprise advisory, consulting, IT services and solutions with a focus on local government, utilities, education, defence, federal government, financial services, and manufacturing industries. Atturra has partnerships with leading global providers including Microsoft, Boomi, Software AG, OpenText, Smartsheet, QAD, Infor, Vaultspeed, Snowflake and HPE and its clients are some of the largest public and private-sector organisations in Australia.

It has been a busy 2023 for Atturra. Should this deal be successful it will be its 5th of the year so far.

We will continue to watch with bated breath as to whether this deal is completed or perhaps we will see a rival bid. The takeover offer from Atturra represents a significant development in the small-cap space on the ASX. This strategic move reflects the growing merger and acquisition activity at this end of the market, underscoring the evolving dynamics in small cap equities.

​Offer from Atturra to acquire Cirrus increased by 19% to 6.3 cents per share. The revised offer represents a 19% increase in the offer price for Cirrus shares and values Cirrus’ equity at $58.6 million.

Disclosure: Cirrus Networks Holdings Limited (ASX: CNW) is currently held in TAMIM portfolios.