Santa Ana-based Iteris, which develops traffic and mobility management products, says it is seeking "strategic alternatives", and has hired investment banker Moelis & Company to assist it in the review. The company said its board has "initiated a comprehensive review of strategic alternatives to maximize shareholder value." The company did not give any other details on the effort but did say that Latham & Watkins LLP is serving as the Company's legal advisor.
Smart mobility infrastructure management company Iteris Inc’s (NASDAQ: ITI) board unanimously rejected the non-binding, unsolicited proposal from Rekor Systems Inc (NASDAQ: REKR) to acquire Iteris for 17% cash and 83% Rekor shares at current stock prices.
Iteris Board unanimously rejected the unsolicited proposal as it significantly undervalues the company, according to Iteris Chairman Tom Thomas.
“The Board is always looking for ways to maximize value for our shareholders, but Rekor’s proposal does not reflect Iteris’ intrinsic value, including the significant long-term opportunities ahead of us,” added Thomas.
“Benefitting significantly from favorable, long-term trends, Iteris’ financial performance and momentum are accelerating. We are confident that we have the right strategy in place to continue our success, which will deliver profitable growth and increase shareholder value in 2021 and beyond,” said Iteris CEO Joe Bergera.
Rekor proposed to combine with Iteris in a cash-and-stock transaction for $8.15 to $8.50 per share of Iteris, signifying a premium between 48-54% on the Friday closing price of $5.51. The merger consideration would consist of $1.39 per share in cash and between 0.399 and 0.420 shares of Rekor. Iteris’ shareholders would own 30% of the combined company upon the arrangement.
Rekor believed that their software products were highly complementary to Iteris’ existing product portfolio and could be quickly deployed on Iteris’ cameras, sensors, and back-end infrastructure.
The combination was expected to be ideally positioned to gain market share from competitors that use legacy LPR software or lack a scaled footprint following the evolution of municipalities into smarter cities and business automation. The combination exuded the potential to consolidate the fragmented market for smart mobility infrastructure management.
Rekor expressed disappointment upon the rejection at less than a week’s notice and believed that Iteris lacked industry technology understanding.