Macquarie Telecom has launched a bid to acquire fellow ASX-listed cloud and hosting provider Bulletproof in a deal valued at $17.9 million.
The acquisition offer, which was teased earlier this week when both companies went into separate trading halts, is based on a price per Bulletproof share of $0.11, which represents a near-65 percent premium on Bulletproof's last closing price of $0.067c.
Bulletproof's market capitalisation was $10.89 million at its last trade, while Macquarie Telecom was worth $295.6 million.
The deal is subject to shareholder approval and is contingent on Macquarie's offer securing at least 90 percent acceptance from shareholders.
Bulletproof has established an independent sub-committee of board members to evaluate the offer, and has advised shareholders to take no action until the committee "has had the opportunity to evaluate, and provide a formal recommendation in relation to, the offer".
Macquarie chief executive David Tudehope said: "The proposal to purchase all of Bulletproof’s shares for cash is clearly compelling and offers a significant premium to the recent share price performance. Bulletproof has experienced a deterioration of earnings over the last 18 months."
Bulletproof went public via a reverse takeover in 2014 and reached a share price high of 53c in early 2016, before a continued fall in value to its current price of less than 7 cents.
The combination of the two publicly listed IT firms would create a Australian-owned cloud company with around $270 million in revenue.
"Bulletproof is a long-standing business with a talented and experienced team. There is a strong strategic fit with Macquarie," Tudehope added.
"The combination will enable Macquarie and Bulletproof customers to access a full set of cloud options of colocation, private cloud and public cloud. We believe it is in the interests of Bulletproof shareholders to accept the Macquarie offer."
While the two companies both offer hosting platforms based around VMware, they have taken distinctly different approaches to public cloud.
Bulletproof has been bullish about public cloud and became Amazon Web Services' first Australian premier partner in 2013. It later extended this public cloud focus to Microsoft Azure support.
MacTel, on the other hand, has been more focused on its cloud platform housed locally in its own Australian data centres. The company's Govzone cloud recently achieved Protected accreditation.
Macquarie Telecom was chosen as the co-location provider for Dell EMC's Virtustream public cloud earlier this year.
The acquisition would be just the latest in a series of mergers between hosting companies in Australia in the past 12 months, which has seen a bevy of deals among the likes of Servers Australia, Digital Pacific, Anchor Hosting and Panthur.