Life360 (ASX:360) share price halted amid $280 million acquisition

The tie-up with US company Tile will enable location-based finding of people, pets, and things…

| More on:
shaking hands over montage suggesting a takeover or merger

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Life360 Inc (ASX: 360) share price was halted from the open today. This comes after a company announcement on a strategic acquisition and equity raising.

The Life360 share price was $13.51 before the company requested a pause in trading on its shares.

Here are the details.

Strategic acquisition and equity raising

Life360 advised it has entered into a binding agreement to acquire 100% of the “cloud-based finding platform” Tile. The deal was settled for a total consideration of approximately $282.8 million. The purchase price includes US$35 million in retention awards for Tile employees.

Tile was founded in 2012 and is based in California. It is reported to be the “global leader in finding things and locates millions of unique items every day”.

Life360 notes that Tile offers a range of ‘Tile trackers’ that vary in size and can be attached to products such as electronics, backpacks, and keys – a key differentiator from competitors.

According to Life360, the combination of its family safety platform and Tile’s business model “creates an integrated market leader in location solutions for all life stages, enabling a seamless experience for families that integrates people, pets, and things”.

Life360 will pay the $282.8 million deal by way of cash and up to US$37.6 million of new Life360 shares issued to Tile shareholders.

The total consideration represents a CY21 revenue multiple of approximately 1.5x before any earn-out payment; or approximately 2.0x assuming the earn-out is paid in full and inclusive of the retention awards, per the release.

To finance the deal, Life360 will undertake a fully underwritten equity raising to institutional investors. In total, the entitlement offer and institutional placement will raise gross proceeds of around $280 million.

Investors can expect the transaction to settle in Q1 2021, according to the announcement.

Life360 also reiterated guidance of annualised monthly revenue by December 2021 in the range of US$125–130 million for its core business.

Management commentary

Speaking on the announcement, Life360 co-founder and CEO Chris Hulls said:

This is genuinely the most impactful deal in our company’s history, and along with our Jiobit acquisition from earlier this year, our vision of linking people, pets and things all in one place is now complete. As some backstory, I met the company’s co-founders, Nick Evans and Mike Farley, back in 2014. We connected immediately because it was clear to us that we would either be working together or be competitors at some point in the future, as we both had what I’ll call the religious belief that location would be part of everything. We had the platform of mobile phones covering people. They had the hardware device covering things.

Life360 share price snapshot

In the past 12 months, the Life360 share price has soared by more than 252%. It has also rallied 255% this year to date.

In the past month, it has climbed almost 43% and is up 3% in the last week. For comparison, the S&P/ASX 200 index (ASX: XJO) is up around 12% in the past year.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Life360, Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Mergers & Acquisitions

A man stands with his arms crossed in an X indicate that not everyone is buying ASX mining shares despite the commodities rally
Mergers & Acquisitions

Link share price drops on takeover rejection

Link has rejected a takeover offer from Dye & Durham...

Read more »

Two men shaking hands on a merger.
Mergers & Acquisitions

HRL share price jumps 10% as board backs takeover from ALS

HRL has accepted ALS' takeover offer...

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Mergers & Acquisitions

Why is the Carsales share price crashing 15% lower today?

Carsales shares are sinking on Wednesday. Here's why...

Read more »

A little girl with red hair runs excitedly with a rocket strapped to her back, trying to launch.
Mergers & Acquisitions

Guess which small-cap company is soaring 71% on a takeover bid from an ASX 200 share

ALS’ non-binding takeover offer represents a massive premium on HRL’s recent share price.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Mergers & Acquisitions

Tassal share price rockets 14% on $1 billion takeover bid

The board of the Tasmanian-based salmon farming company believes the takeover proposal is not in the best interests of shareholders.

Read more »

Business meeting
Mergers & Acquisitions

Link share price pushes higher despite revised takeover offer

Link shares are pushing higher on Monday following a takeover update...

Read more »

Projection of two hands being shaken on a deal.
Mergers & Acquisitions

2022 has seen a record first half for ASX mergers and acquisitions. Here’s the lowdown

Deals have hit new heights in Australia so far this year.

Read more »

Man looking excitedly at ASX share price gains on computer screen against backdrop of streamers
Mergers & Acquisitions

Guess which ASX software share just rocketed 150% on takeover news

PayGroup shares are moving into uncharted territory today.

Read more »