Mitek Systems Inc. has been an acquisition target for Florida-based ASG Technologies, and its activist-investor owner, Elliott Management Group, for several months. Now, the San Diego fintech company may be able to choose from a few more suitors.

In its first quarter earnings conference, Mitek disclosed it was considering proposals from ASG and “other interested parties.”

‘Open to All Alternatives’

“…we are open to all alternatives to maximize value for our shareholders, including a strategic transaction,” Mitek CEO Max Carnecchia said during the earnings call late last month.

Some of those alternatives might include private equity firms, said Mark Shappel, an equity research analyst for Benchmark.

“My suspicion is you’ve got a mix of private equity firms and strategic buyers in the mix,” Shappel said. “If management and the board like the bids, it means they get bought.”

According to an anonymously-sourced report by The Deal, Mitek sought to collect first-round bids by the end of February. The company reportedly hoped to reach a decision by the end of March. Mitek did not respond to requests for comment for this article.

Leadership Change

Mitek, which makes identity verification and mobile check deposit software for banks, received its first bid from ASG Technologies last summer. It all began shortly after Mitek’s longtime CEO, Jim DeBello, and Chief Financial Officer, Jeff Davison, tendered their resignations in August.

Since then, Mitek has filled DeBello’s position with the appointment of Carnecchia, and Davison agreed to stay with the company, rather than taking a new job in Montana, where he currently lives.

However, ASG and Elliott turned up the pressure, in an attempt to convince shareholders that a sale would be the best course of action.

In October, ASG publicized its offer to acquire Mitek, and after the company turned it down, Elliott published a letter to Mitek’s board criticizing their “refusal to engage” with ASG. The company’s latest known proposal was to acquire Mitek for $11.50 per share, up from its previous offer of $10.

Like most activist investors, the company’s goal is to use its holdings in a publicly-traded company to force it to make change, and raise the price of its stock.

Cost Reduction Path?

Shappel said Elliott was best known for acquiring struggling software companies at low prices, and making massive cost reductions to improve the companies’ margins.

In its letter to Mitek’s board, Elliott Partner Jesse Cohn warned two-thirds of Mitek’s revenue was tied to check deposits, and said a merger with ASG would help Mitek grow its identity verification business. He also said Elliott was now a larger investor in Mitek than all of Mitek’s non-executive directors combined.

However, Elliott owns just 0.78 percent of Mitek’s outstanding shares.

“Elliott does not take a terribly meaningful position in the company,” Shappel said. “My view is Elliott came here and put (Mitek) in play. They caught them at a tough time when there was no CEO and no CFO.”

With the attention Mitek is reportedly getting from other companies, Shappel said Mitek might be able to get a better deal.

Avoiding Elliott

“They don’t want to be bought by Elliott. The company, ASG Technologies, that Elliott has—it wouldn’t be a good fit culturally or technologically,” he said. “Mitek’s not a broken company. They’re a viable software vendor in the fintech space with respectable growth rates.”

In the company’s most recent quarter, Mitek reported $17.83 million, up from $12.13 million in the first quarter of 2017. The company is still operating at a net loss of $3.19 million, though its bottom line has improved by 44 percent from last year.