Acquisition marketing platform System1 Inc. has a substantial offer on the table from investment company Just Develop It Ltd. Just Develop It has proposed a $240 million acquisition of one of System1’s subsidiaries, a cybersecurity platform called Total Security Ltd., with a non-binding indication of interest.
Marina del Rey-based System1 provides customer acquisition tools to advertisers and has about 2.8 million paying users. The company has made a series of strategic acquisitions including MapQuest Holdings LLC, StartPage and CouponFollow, the latter of which is owned by NextGen Shopping LLC.
Business operations for Just Develop It and System1 have overlapped in the past. System1 went public on the New York Stock Exchange in January of last year, accomplished through a business combination with Trebia Acquisition Corp. In that deal, System1 merged with privacy subscription platform Protected.net. Protected has received investment from Just Develop It in the past and has since been rebranded as Total Security. Total Security is still owned by System1 and its cybersecurity products include antivirus protection, password management and VPN encryption..
At the time of its public listing last year, System1 was valued at $1.4 billion. In Just Develop It’s formal acquisition offer, which was filed with the Securities and Exchange Commission on Sept. 1, the company said it wants to purchase Total Security for $240 million in cash. The acquisition would also include assumption of certain potential earnout payments and the delivery of 29 million shares in System1 that Just Develop It and its affiliates currently own. Just Develop It said the deadline for the deal is Oct. 20 and that the cash offer will be reduced to $230 million after that date. Due to the companies’ “familiarity” with one another, Just Develop It said that it would not need a “lengthy” due-diligence period.
“We understand (System1’s) desire to close the proposed transaction in an expeditious manner, and we are prepared to, and will, devote the necessary resources to do so,” Just Develop It wrote in the offer.
