Checkit Share News (CKT)

(Sharecast News) - Checkit announced the acquisition of its United States-based sole distributor Tutela Monitoring Systems on Thursday, including cash of about $0.25m in Tutela at the date of completion, for a total upfront cash consideration of $0.85m (£0.62m).
The AIM-traded firm said the transaction was being funded from its existing cash resources.

It said Tutela was previously owned by Next Control Systems, now its subsidiary Checkit UK, as Next Control Systems was acquired by the group in May 2019.

Tutela was sold to the US management team of Tutela in August 2018.

Checkit said Tutela, based in Florida, provides wireless temperature monitoring systems for all applications and facilities which stored sensitive inventory for businesses within the healthcare sector.

The group intended to utilise Tutela as a platform to pursue all industries and verticals targeted by Checkit.

In the year ended 31 December, Tutela's sales were about $2m, with profit before tax coming in at $0.27m and net assets including cash totalling $0.16m.

If the businesses had been consolidated during that period, about £1m would have been added to group sales per annum after eliminating intercompany sales on consolidation, the board said.

The acquisition would serve to accelerate the group's US expansion plans, the board explained, providing a footprint and an opportunity to add further scale.

Its directors said they believed that, based on relative population sizes, the US represented an addressable market around five times larger than the UK, and thus believed the acquisition represented a "significant milestone" in its growth strategy.

Checkit also announced the appointment of two senior business development executives, Kit Kyte and Steve Peck, effective 1 February.

It said Kyte had joined the group as chief commercial officer in the UK and would lead the sales, marketing and commercial operations functions.

He was previously with New York-based professional services firm Genpact.

Peck, meanwhile, had joined Checkit as managing director of Checkit Inc, which includes Tutela.

He was based in Texas, and was previously employed by cloud management software giant Oracle NetSuite.

Peck had "considerable experience" of Checkit's two most important vertical markets, healthcare and food retail.

"The acquisition of Tutela marks another milestone for Checkit. It provides a base from which to expand in our key geographical target market, the US," said executive chairman Keith Daley.

"We look forward to realising the many opportunities that the transaction and these appointments present."

At 1455 GMT, shares in Checkit were up 5.4% at 52.7p.