Atturra prepares higher bid for Cirrus Networks

afr.com:

Listed IT solutions business Atturra is expected to hit back with a higher bid at Cirrus Networks Holdings, after its 5.3¢ a share scheme bid from Monday won over the target’s board but failed to woo investors.

IT services group Atturra has found an acquisition target.  Nic Walker

Sources said the two camps were negotiating the price bump on Thursday, while both’s stock was halted from trading until Monday morning. Atturra is being advised by MA Moelis, while Cirrus has Latimer Partners in its corner.

The 5.3¢ bid was a 29.3 per cent premium to Cirrus’s last close and made its way to shareholders as a board-blessed binding scheme bid. However, the stock rapidly shot past the bid price to close at 5.6¢ on Monday. Key among them was Microequities Asset Management, which climbed up to 11.56 per cent of the register – a decent sized stake for a scheme bid.

Obviously, investors think Atturra needs to go up. If that is because they reckon there’s chance of a competing bid and/or if Cirrus is worth more is open to question.

It was not known by how much Atturra would be willing to go up by, but investors would love to see a bid above the 6¢ a share level.

Cirrus’s management services focus primarily on LAN/wireless capability and limited WAN/SDWAN counterparts. A key drawcard is Cirrus’s security-clearance including for defence industry programs. It doesn’t have an applications business, leaving room for Atturra to cross-sell these from its existing stables into Cirrus’s client base.

The original deal implied an 8.8-times multiple on an enterprise valuation to EBITDA basis for the financial year just gone. Atturra told its shareholders the deal would be high single digit EPS accretive to its shareholders from this financial