British software company Ideagen is digging deep to take control of Australian environmental intelligence technology company Envirosuite (ASX: EVS) through a potential $144 million takeover bid which is priced at more than twice the company's valuation at the close of the market yesterday.

Ideagen has put forward an unsolicited indicative proposal to acquire all the stock in the Melbourne-based company for 10c per share – a 133 per cent premium to yesterday's closing price of 4.3c.

The news sent Envirosuite shares soaring to a high of 8.5c this morning after Ideagen indicated it was engaging with the company’s largest shareholders to garner their support for the buyout.

Among them is likely to be Hitachi Construction Machinery which secured a 12 per cent stake in Envirosuite in September last year, forking out $10 million at 5.8c per share as the Japanese giant sought to accelerate the development and adoption of environmental and safety intelligence technology within the mining industry.

Envirosuite’s environmental intelligence technology is used across the aviation, mining, industrial, waste and wastewater sectors to help clients manage complex operational challenges, reduce risk and improve productivity.

The latest offer follows an announcement by Envirosuite in June last year that it was in “confidential discussions” with several parties, including Potentia Capital, about a potential takeover.

Ideagen’s takeover proposal comes on the heels of a solid earnings performance by Envirosuite in the first half of FY25, with the company last week reporting a return to underlying profit with EBITDA of $204,000 despite a marginal drop in group revenue to $29.48 million.

The business benefitted from tighter control of costs and was aided by redundancies from the restructure of its water services business.

Notably, recurring revenue lifted 3.5 per cent in the half year to $26.93 million as lower costs also led to a 1.7 per cent lift in gross profit to $15.86 million.

Envirosuite has previously announced its goal is to double annual recurring revenue every five years through a “disciplined approach to high-quality revenue growth, strengthening customer support and ongoing investment in leading technology”.

The company’s partnership with Hitachi Construction Machinery is integral to the plan by capitalising on momentum in the mining sector, with the company announcing last week that its first deal from the partnership is in advanced stages of negotiation.

Ideagen is described as a global software company that specialises in providing “innovative solutions to enhance governance, health and safety, risk management and compliance practices” for a range of businesses across multiple industry sectors.

Envirosuite notes that the indicative proposal from Ideagen is subject to several conditions, including exclusive due diligence, unanimous recommendation by the Envirosuite board and approval from shareholders.

“Ideagen has advised that it intends to engage with the company’s major shareholders,” says Envirosuite.

“While certain aspects of the indicative proposal are still to be clarified, the Envirosuite board has formed the view that it is in the interests of Envirosuite’s shareholders to engage further with Ideagen on their indicative proposal.

“As announced in its recent half-yearly results, Envirosuite was undertaking a strategic review of the company’s operations and potential strategic direction.

“Envirosuite is continually assessing opportunities to maximise shareholder value, return on capital and to ensure the business is well-positioned for future growth.”

The company notes that there is no guarantee that a binding proposal will be forwarded by Ideagen.

“The board will act in what it considers to be in the best interests of the company and its shareholders, including assessing the merits of the indicative proposal relative to other value-maximising strategies for shareholders,” says the company.

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