Rhipe confirms Crayon buyout bid

Dominic O'Hanlon (Rhipe)

Publicly listed cloud software distributor Rhipe has confirmed it has received an indicative, non-binding takeover offer from Norwegian headquartered IT consultancy Crayon, offering A$2.50 per share, valuing the deal at roughly A$402.69 million.

“There is no certainty that Crayon will submit a binding proposal. However, Rhipe and Crayon are continuing to work together collaboratively to facilitate a satisfactory outcome," Rhipe told shareholders on 1 July. 

Rhipe's current market capitalisation sits at A$336.64 million. The distributor has appointed Jefferies Australia as financial advisor and Allens as legal advisor.

The proposal stated that any final, binding offer would be subject to a number of conditions, including the satisfactory completion of confirmatory due diligence and negotiation of a scheme implementation deed, and unanimous and continuing recommendation of the Rhipe board.

It also requires no material adverse change occurring in relation to Rhipe and other customary conditions, including Rhipe shareholder approval, Foreign Investment Review Board (FIRB) approval and other requisite regulatory approvals.

Rhipe entered a trading halt on 29 June, citing an impending announcement in relation to "a control transaction involving the company", with the halt lifting on 1 July.

Crayon stood out as the potential bidder, seeing that it occupies a similar market space to Rhipe and has the potential cash to splash in the market.

It had been uncovered that Crayon was talking to investors, saying it was pursuing an acquisition that would “cement Crayon’s position as a global leader in direct and indirect software cloud licensing, cloud services, data and AI [artificial intelligence] and software cloud economics”.

Such an acquisition would also fit in with Crayon’s recent activity in the Australian market, which has seen the purchase of Sydney-based Oracle specialist Navicle last year, along with Winc’s software licensing business.

In May, Rhipe hedged its bets on the cyber security market with the acquisition of emt Distribution, paying A$11 million cash upfront for the security’s specialist’s Australian and Asian businesses, with its Middle East business also included in the line-up. 

Emt CEO, Richard Rundle, also joined Rhipe to oversee the new division, alongside the expansion of the distributor's security offering to its existing small- to medium-sized (SMB)-focused customers.