Checkit Acquires Tutela Monitoring Systems: A Strategic Move to Expand Business Operations

Edison Investment Research has released a report outlining Checkit's acquisition of Tutela Monitoring Systems (Tutela), its exclusive distributor in the US, for consideration of $0.85m/£0.62m from existing cash resources. This strategic move is expected to enable Checkit to pursue all target industries and verticals in the US.

According to Edison's analysis, Tutela provides wireless temperature monitoring sensors for all applications and facilities that store sensitive inventory for healthcare businesses, similar to the UK-based CAM+ business already owned by Checkit. The company was previously owned by Next Control Systems before a management buyout in August 2018 and was later acquired by Checkit in May 2019.

The acquisition of Tutela is expected to be earnings accretive, with Edison estimating that Tutela generated revenue of c £1m in CY20, equating to PBT of $0.27m/£0.2m on a consolidated basis. The company's net profit before tax (PBT) margin was 10%, which is expected to be maintained post-acquisition.

Checkit intends to use Tutela as a platform to pursue all target industries and verticals in the US, leveraging the company's expertise in wireless temperature monitoring sensors. This strategic move is expected to expand Checkit's business operations and increase its presence in the US market.

Edison Investment Research has maintained its forecasts pending the year-end trading update expected later this month. The report highlights that Tutela's revenue growth potential is significant, with the company well-positioned to benefit from the growing demand for wireless temperature monitoring sensors in the healthcare industry.

In conclusion, Checkit's acquisition of Tutela Monitoring Systems is a strategic move that is expected to expand its business operations and increase its presence in the US market. The acquisition is earnings accretive, with Tutela generating revenue of c £1m in CY20, and has significant growth potential due to the growing demand for wireless temperature monitoring sensors in the healthcare industry.

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