NEWS12 October 2020

Tobii sells Smartbox

M&A News UK

UK – Eye tracking company Tobii AB has been forced to sell its shares in assistive technology firm Smartbox following an intervention from the Competition and Markets Authority (CMA).

Eye tracking

Tobii bought Smartbox in August 2018, but has now agreed to sell Smartbox to CareTech, an assistive technology provider. Eye tracking is a sensor technology that allows a computer or other device to know where a person is looking, and can detect the presence, attention and focus of the user.

The CMA ruled earlier this year that the merger between Tobii and Smartbox was likely to lead to reduced competition in the UK, and that Tobii must divest from the company.

The CMA had decided that as Smartbox owned the augmentative and assistive communication (AAC) software that was licensed to competitors of Tobii, there could be a substantial lessening of competition (SLC) in the market.

“We find that the parties were close competitors in the supply of dedicated AAC solutions in the UK pre-merger, and that competitors will not provide sufficient constraint to mitigate the effects of the merger on competition,” claimed the CMA ruling.

“We therefore conclude that the merger has resulted, or may be expected to result in an SLC in the supply of dedicated AAC solutions in the UK.”

The maximum purchase price for Smartbox is £13.4m, of which £3.6m consists of an earnout and £2.8m of net cash and net working capital adjustment, Tobii said. The price is similar to that paid to acquire Smartbox in 2018.

Tobii said in a statement that the deal meant both it and Smartbox would become competitors and to some extent work together as partners.

Henrik Eskilsson, chief executive of Tobii, said: “We regret CMA’s decision which forces us to sell Smartbox, but are pleased that we have reached an agreement that likely will allow us to receive the purchase price back, while Smartbox ends up with a suitable and responsible owner.

“We are convinced that CareTech will take good care of the company, its employees and the users, and we look forward to continue to work side by side with CareTech to drive the industry for assistive technology for communications forward.”