Current Price: £3.85
Offer Price: £4.05
Expected Closing: 15th of June
Trading volume is very limited (<10k per day) so this is actionable for small PAs only. IndigoVission is listed on London AIM market.
Video security systems provider IndigoVision is getting acquired by electronics giant Motorola Solutions for £4.05/share in cash (£30.4 million in total). Shareholder approval was received on the 11th of May, so the only remaining hurdle remains to be a sanctioning by the court. Companies estimate closing around 15th of June, so although the upside in absolute terms is not that high, an attractive IRR could potentially be realized.
The main question is whether the buyer will continue to comply with its obligations to close the transaction. I think the chances of successful closing are very high as 1) the agreement was made after the COVID-19 outbreak already started; 2) this a strategic acquisition of a speck size to the buyer; 3) if Motorola wanted out, it would've done that already, so at this point walking away seems unlikely.
Motorola stated that following its acquisition of Avigilon (video surveillance and analytics) in 2018, IndigoVision will further complement its video security segment (video analytics, network video management software and hardware, video cameras etc.) and offer numerous other benefits such as:
- cross-selling opportunities.
- improved cost/operational efficiency by replacing "current third-party manufactured IndigoVision products with Motorola Solutions products".
- enhanced geographical reach across a wider customer base. 40% of IND sales are in Europe, Middle East and Africa, 32% - NA, 22% - Asia Pacific, 7% - Latin America.
Nonetheless, it should be noted that, as the offer premium is quite high (129% to pre-announcement close), in case things go south, the downside could be very material.
IndigoVision manufactures and markets video security systems (software, cameras, encoders, recorders etc.). The company's security camera technology is used in airports and by casinos and police forces, while its clients include BMW, IKEA, Amazon and the NHS.