SLI Systems says it has received a Takeover Notice from Texas-based ESW Holdings, valuing the NZX-listed search software company at $40m - or more than double its closing price on Friday.
ESW bills itself as a turnaround specialist.
It has offered to acquire all of SLI's stock for a price of not less than 63 cents per share.
Although a 110 per cent premium on SLI's Friday close of 30c, the offer will still leave long-term investors out of pocket.
SLI listed in 2013, debuting at $1.50 a share and closing its first day of trading at $1.78. It hit a high of $2.69 in March 2014 before a string of disappointing results saw the stock enter a prolonged slump.
In late trading today, the stock [NZX:SLI] was up 86.87% to 56c.
The offer is conditional, including ESW gaining more than 90 per cent of the voting rights in SLI.
It has so far reached agreement from 18 shareholders, representing 51 per cent of the company's issued capital, a spokesman for SLI said this morning.
The largest single shareholder is SLI founder Shaun Ryan with an 8 per cent holding. Early investor Sam Morgan has a 2.88 per cent stake.
SLI also qualified for a Growth Grant from Crown agency Callaghan Innovation, worth up to $5m per year in matching R&D funding for 2015 to 2020 (the controversial scheme is being phased out).
Christchurch-based SLI has formed a takeover sub-committee made up of SLI chairman Greg Cross, Sarah Smith and Andy Lark (who has just been replaced as CMO at Foxtel by another Kiwi, Kieren Cooney). Northington Partners has been hired to independently value the offer.
The sub-committee urged shareholders to wait until they receive the target company statement before acting.
SLI recently reported its first profit since listing.
The e-commerce company made $4.1 million (from its year-ago $1.6m loss) on revenue that increased 7 per cent to $33.8m.
The move into the black followed a round of cost-cutting, including redundancies, that pushed expenses down 9.3 per cent.
SLI was founded by the Invercargill-raised Ryan to commercialise search engine technology he developed specifically for e-commerce sites, which helps to track buyer behaviour and up repeat visits.
Ryan resigned as CEO in late 2014, moving to more of a product development role as the San Francisco-based Chris Brennan took the reins. The American still runs the company.