Macquarie Telecom Group (ASX:MAQ) has made a bid to acquire cloud solutions provider, Bulletproof (ASX:BPF), through its subsidiary, Macquarie Cloud Services, for $17.9 million.
Macquarie Telecom revealed on 21 November it had made an off-market bid via its Macquarie Cloud Services subsidiary to acquire all Bulletproof's ordinary shares for $0.11, representing a 64.2 per cent premium on the closing price of Bulletproof's shares on 17 November, before it went into a trading halt.
On 20 November, both companies requested a trading halt, with Bulletproof revealing it was in negotiations to potentially be acquired, while Macquarie said it was getting ready to announce a proposed acquisition.
"The proposal to purchase all of Bulletproof’s shares for cash is clearly compelling and offers a significant premium to the recent share price performance," Macquarie chief executive, David Tudehope, said. "Bulletproof has experienced a deterioration of earnings over the last 18 months."
According to the Tudehope, Bulletproof is a long-standing business with a talented and experienced team and there is a strong strategic fit.
"The combination will enable Macquarie and Bulletproof customers to access a full set of cloud options of colocation, private cloud and public cloud. We believe it is in the interests of Bulletproof shareholders to accept the Macquarie offer."
Bulletproof has established an independent sub-committee of the board, due to Macquarie Cloud Services' pre-existing holding of a "relevant" interest in 16.47 per cent of voting shares in Bulletproof through an entity affiliated with Bulletproof's CEO, Anthony Woodward.
The independent committee has advised shareholder to take no action at this point.
One of the most recent and significant departures was Lorenzo Modesto, Bulletproof’s co-founder and director of strategy, who resigned from the role on 1 September.
Modesto, who was “instrumental” in the company’s growth over 16 years, left to pursue “other interests” but remained as a substantial shareholder, the company said at the time.
Bulletproof closed the 2017 financial year with a four per cent growth in revenue, compared to the same period last year, posting a total of $49.2 million. The company has gone through extensive restructure throughout the year in order to restructure the business. In February, it announced it was letting go of 30 full-time engineers, which would result in $4.5 million savings.
The company has, however, closed the year with a net profit after tax (NPAT) loss of $6.1 million. The underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were $2.18 million, down 53.6 percent compared to the previous year.