Kontron America and Bsquare jointly announced on 13th October the execution of a definitive merger agreement by which Kontron will acquire Bsquare. Under the terms of the agreement, Kontron will commence a tender offer for all outstanding shares of Bsquare for $1.90 per share of common stock in an all-cash transaction, representing an implied equity value of approximately $38 million.
The Bsquare acquisition expands Kontron’s IoT offering by adding extensive software capabilities, and enables Kontron to more effectively market its European software solutions in North America.
Commenting on the transaction, Hannes Niederhauser, Kontron CEO, said: “The acquisition of Bsquare is an important step to strengthen our software development, marketing, and integration in North America. We expect strong synergies in cross-selling with our San Diego-based subsidiary. The Bsquare SquareOne product will be a good extension to our susietec software family.”
Ralph C. Derrickson, Bsquare’s President and CEO added: “Bsquare’s business will combine naturally with Kontron’s IoT hardware products and services to create a more complete solution for our customers. The acquisition provides liquidity for Bsquare shareholders while providing scale and efficiency for the business.”
Under the terms of the merger agreement, which has been approved unanimously by the board of directors of both companies, a wholly-owned subsidiary of Kontron will commence a tender offer to acquire all outstanding shares of Bsquare for $1.90 per share of common stock in cash, for a total equity value of approximately $38 million. The offer price represents a 62% premium to the trailing 52-week volume weighted average of Bsquare’s closing stock prices as of October 10th, 2023.
In connection with the execution of the merger agreement, certain of Bsquare’s shareholders, as well as each director and executive officer, holding approximately 17% in the aggregate of Bsquare’s outstanding shares, entered into an agreement on substantially similar terms in which they agreed to tender all of their Bsquare shares in the tender offer.
The closing of the transaction will be subject to customary conditions, including the expiration or termination of certain regulatory periods and the tender of at least two-thirds of Bsquare’s outstanding common stock in the tender offer. Upon the successful completion of the tender offer, Kontron would acquire any untendered shares of Bsquare’s common stock through a second-step merger effected for the same per common share consideration. The transaction is expected to close later in 2023.
After closing, Bsquare will become a privately held company, and shares of Bsquare common stock will no longer be listed on any public market.
Barnes & Thornburg LLP serves as Kontron’s legal advisor.
Telegraph Hill BD LLC, the broker-dealer subsidiary of Telegraph Hill Advisors, LLC, is acting as financial advisor to Bsquare. DLA Piper LLP (US) serves as Bsquare’s legal advisor.