Advisory and technology services business Atturra (ASX: ATA) has entered into a binding Scheme Implementation Deed for its subsidiary Atturra Holdings to acquire 100% of the ordinary share capital of Cirrus (ASX: CNW).
The total Scheme Consideration of $0.053 per Cirrus share represents a 29.3% premium to the last closing price of Cirrus shares on 8 September 2023 and a 25.5% premium to the 30-day VWAP of Cirrus shares to 8 September 2023.
The proposed acquisition is a strong strategic fit for Atturra, with the combined company creating one of the largest Australian-sovereign advisory and technology solutions providers, with increased operational and geographic scale.
Cirrus provides Atturra with a broadened and complementary range of offerings, an enlarged customer base with a focus on government, energy and resources and other corporate clients, and a strengthened geographic presence in ACT, WA and VIC. Cirrus’ existing strategic partnerships and customer relationships are expected to facilitate Atturra’s expansion of major vendor relationships to unlock growth in key segments.
The increased scale from Cirrus is transformative to Atturra’s managed services offering, which will facilitate the delivery of highly recurring, multi-year services across Atturra’s and Cirrus’ enlarged client base.
Atturra and Cirrus represent two of the few remaining independent, Australian-owned ICT services companies given the broader sector consolidation. Combining the strengths of both companies and remaining a true sovereign player represents a key competitive advantage. Atturra has a demonstrated history of successfully integrating and leveraging the capabilities of its acquisitions. The combined entity is well positioned to become the go-to provider for key government agencies whilst continuing to pursue other customer industries.
Given its targeted focus on strategic and cultural alignment, Atturra believes Cirrus is strongly aligned in this regard. The proposed acquisition also provides an opportunity to leverage the comprehensive suite of offerings across the two businesses and provides significant future cross-selling opportunities.
The acquisition is expected to be high single digit EPS accretive to Atturra shareholders in FY24 on a pro forma and normalised basis (excluding any one-off transaction or integration costs and with a conservative assessment of anticipated synergies)
The Scheme has been unanimously recommended by the Cirrus Board of Directors.