Trading halt yesterday to announce the purchase of Tile Inc for A$280M (including incentives).

For anybody unfamiliar with Life360 a little background is helpful:

Life360 provides a mobile app platform for family messaging, location safety, driving safety, crash detection & emergency assistance etc. CY21 Revenue US$111M. Life360 is approaching cash flow breakeven and scaling rapidly.

At the CY2020 results release Life360 announced an acceleration strategy to broaden their market reach.

Since this time two key acquisitions have been announced:

1. Jiobit - Provider of wearable location devices with annualised revenue of US$11.7M. Think small children, pets, elderly relatives etc. (Terms include US$54.5M in 360 shares - including performance targets). This acquisition was completed in August 2021.

2. Tile Inc - Operates a global leading platform for finding 'everyday things'. Things like keys, wallet, passport etc. CY21 Revenue of US$103M. (Terms include US$205M funded by cap raise of 23.3M 360 shares at A$12 based on current A$ exchange rate).

Life360 have a Freemium model and offer premium memberships with additional functionality. The acquisitions appear highly complementary and clearly the intent is to drive membership growth in premium subscriptions. I think the combined offering is compelling.

Comments on Tile Inc acquisition:

1. YonY subscription growth >50% (similar to Life360)

2. YonY subscriber growth 26% (same as Life360)

3. Acquisition cost at 2xCY21 revenue (looks cheap)

4. Deal close by 1st QTR CY22 (so no impact on current CY21 financial year.

Life360 SP had been flat at or about A$9.50 for September & October and suddenly increased 40% during November prior to the Tile Inc announcement. A little suspicious to me.

DISC: I own IRL