The Cirrus Networks Holdings Ltd (ASX: CNW) share price is rocketing on Monday.
At the time of writing, the ASX tech share is up a massive 32% to 5.4 cents.
Why is this ASX tech share rocketing?
Investors have been scrambling to buy the information technology solutions company's shares today after it received and accepted a takeover approach.
According to the release, larger rival Atturra Ltd (ASX: ATA) has tabled a 5.3 cents per share offer to acquire Cirrus Networks. This represents a 29.3% premium to its last close price and values the company at $49.3 million.
Cirrus Networks shareholders will be given the opportunity to elect either 75% cash and 25% shares, 100% cash, 50% cash and 50% shares, or 100% shares. However, this is subject to a scale-back mechanism to achieve an overall approximate 75% cash/25% shares mix.
This offer has been accepted by Cirrus Networks and the two parties have entered into a scheme implementation deed. The ASX tech share's board unanimously recommends that shareholders vote in favour of the scheme, and each director intends to vote all shares controlled by them in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert's report.
Why is Atturra acquiring Cirrus?
Atturra's CEO, Stephen Kowal, believes there are strong strategic reasons to acquire Cirrus. He explains:
The acquisition of Cirrus has strong strategic and cultural alignment with Atturra's industry and service capabilities and is a positive step towards Atturra's vision to be Australia's leading advisory and IT solutions provider. Cirrus will significantly expand Atturra's recurring managed service capabilities and will provide an enlarged and complementary client base with significant future cross-sell opportunities.
Cirrus brings a wealth of expertise in the government and energy & resources industries, having serviced some of the leading names across these sectors respectively, enhancing Atturra's ability to become a market leader in these sectors. We look forward to working with and welcoming the Cirrus team to Atturra.