Australian-born PDF and e-signature software company Nitro Software has received an acquisition proposal from Alludo, which owns the CorelDRAW and WinZip brands, and has rejected a bid from Potentia Capital Management.
Alludo has proposed to buy Nitro by way of Scheme of Arrangement at $2.00 cash per share. Alludo is also willing to go ahead with an off-market takeover bid with a 50.1 percent minimum acceptance condition, offering $2.00 cash per share.
The proposal won’t necessarily result in a binding transaction being put forward to shareholders. Nitro has entered into a Process Deed to explore whether a definitive transaction can be agreed on. The proposal is subject to a number of conditions, including due diligence on Nitro and its business and the unanimous recommendation of Nitro’s Board of Directors.
Nitro was started in Melbourne in 2005 and boasts than three million licensed users and 13,000 business customers including more than half of the Fortune 500. Its enterprise customers include Toyota Financial Services, T-Mobile, JLL and Pacific National.
In July 2021, Nitro acquired PDFpen software from US-based Smile Inc.
Its partner program caters to resellers, distributors and, system integrators. Nitro’s distributors in Australia include Aquion and Synnex Australia, and it lists Insights and Software One as local resellers.
In addition to owning CorelDRAW and WinZip, Alludo also owns Parallels, MindManager, Roxio, PaintShop Pro and WordPerfect, among other brands.
Nitro board rejects Potentia bid
Meanwhile, Nitro has rejected an off-market takeover bid from Potentia Capital Management, which owns 19.8 per cent of Nitro.
Potentia announced on October 28 that it would offer $1.80 per Nitro share, which reportedly valued the company at $430 million. This followed Potentia’s offer of $1.58 per share in August 2022, which was rejected by the Nitro board.
On October 28, Potentia expressed support of Nitro’s founder and chief executive officer Sam Chandler and management. The company also stated its intention to help grow Nitro organically and through mergers and acquisitions.
Potentia partner Michael McNamara stated on October 28, “As Nitro’s largest shareholder, Potentia wants to work constructively with the Nitro Board to conclude a value-creating deal for our fellow shareholders”.
“We have already had friendly and constructive dialogue with the Nitro Board, and this offer is being made to provide them with certainty so that they can engage with us fully and provide access to diligence”.
Potentia managing director Andrew Gray stated on October 28, “Along with our 19.8% stake, this bid is a demonstration of our commitment to Nitro, its team, and to the strategy they are pursuing under the strong leadership of Sam Chandler and stewardship of the Board.
“We are specialist investors in the technology and software sector, and we have been on the same journey of building great companies which Sam and his team are currently treading. We believe we have real value to add as partners in their growth.
Gray continued, “We support the current strategy for the business and the significant investment made in Nitro’s growth. We intend to support the current investment strategy and future capital needs of the business, which we believe is fundamental to its success going forward”.