Life360’s ‘deal of a decade’ to buy US Bluetooth tracker maker Tile, amid new competition from Apple and Google

New competition from Apple and Google has helped this Australian family safety company land its white whale in a $280m deal.

Chris Hulls, CEO of Life 360

ASX-listed family safety tech outfit Life360 will acquire US-based Bluetooth tracker maker Tile in a deal worth up to $282.8m, to be funded by a $280m equity raise.

The combined companies will create a “market leader in location solutions for all life stages”, Life360 CEO Chris Hulls said.

Tile has sold 45 million of its small Bluetooth tracking devices across 195 countries, and Mr Hulls said that Life360’s global user base of over 33 million smartphone users will boost Tile’s finding network by approximately 10 times and provide near universal coverage with higher density.

The deal represents a revenue multiple of about 1.5 times for Tile, and will include $US122.4m ($169.37m) of cash, up to $US37.6m of new Life360 shares issued to Tile shareholders and up to $US35m in retention awards for Tile employees, subject to performance hurdles.

Life360 will raise funds through a new entitlement offer and institutional placement underwritten by Credit Suisse and Bell Potter. The equity raising will be made up of an approximately $119.8m 1-for-15.64 accelerated non-renounceable entitlement offer of new Life360 CDIs; and an approximately $160.2m placement of new Life360 CDIs to institutional investors.

“This is genuinely the most impactful deal in our company’s history, and along with our Jiobit acquisition from earlier this year, our vision of linking people, pets and things all in one place is now complete,” Life360 Mr Hulls said.

The executive said that he met Tile’s co-founders, Nick Evans and Mike Farley, in 2012 and that it would be clear the three of them would either be working together or be competitors in the future.

“We both had what I’ll call the religious belief that location would be part of everything. We had the platform of mobile phones covering people. They had the hardware device covering things. We almost joined the companies together many times in our history, and I have been close with Tile’s current chief executive, CJ Prober, since he took the reins in 2018,” he said.

“This is not an opportunistic deal that came about from our strategic review, but rather the acquisition I’ve been hoping to make for the better part of a decade.

“Individuals and families will be able to tap into Life360’s flagship mobile app, a market leading app for families with features that range from communications to driving safety and location sharing. Additionally, people will be able to seamlessly leverage Tile’s Bluetooth-enabled finding devices trackers, which can equip nearly any item – such as wallets, keys or remotes – with location-based finding technology.”

He said that Tile’s technology is also embedded in over 50 different third-party devices, ranging from wireless earbuds and headphones to laptops to retainer cases to dog collars.

Tile chief executive CJ Prober, who will join the Life360 board, described the deal as a landmark day for his company.

“This acquisition not only brings together two incredible teams and complementary missions and values, it paves the way for us to jointly build the world’s leading solutions for peace of mind and safety.”

It comes amid rampant competition in the tracking sector. Apple launched its Tile rival AirTag earlier this year, leading to competition-related complaints from Tile vice president and general counsel Kirsten Daru, who told US Congress, “You might be the best soccer team, but you’re playing against a team that owns the stadium, the ball, and the league, and can change the rules when it wants.”

Google has been also rumoured to be soon following suit with its own Bluetooth trackers.

The acquisition follows Life360’s $US54.5m of wearable location device outfit Jiobit earlier this year.

The deal is expected to close in the first quarter of the 2022 calendar year.