Sydney cybersecurity provider Cipherpoint has sold its software division to Canberra-based security software vendor ArchTIS for $1.4 million.
As part of the deal, ArchTIS also acquired Cipherpoint’s European operations, including its office in Germany, existing contracts, sales and development staff and the intellectual property to its software products, cp.Protect and cp.Discover. cp.Protect is a SharePoint on-premises data encryption solution, while cp.Discover is a data discovery and classification platform.
Cipherpoint said the move would see its focus shifted to managed security services following its acquisition of Sydney-based Brace168 in January this year. The company will also resell cp.Protect and cp.Discover as part of its services offering.
“This transaction is compelling. Following the sale, Cipherpoint’s annual operating costs will reduce by approximately $1,060,000 with a very modest impact on revenue. This significantly strengthens our cash flow position,” Cipherpoint chairman Ted Pretty said.
“Cipherpoint will now focus on its managed security services business including Brace168. Cash from the sale will be deployed to drive further growth in our managed services business both organically and by potential acquisitions.”
Cipherpoint chief operating officer Steven Bliim will join ArchTIS as vice president – business development for EMEA, while Ted Pretty will move to the managing director role while remaining board chairman.
ArchTIS said the acquisition complements its NC Protect software, adding data discovery and encryption technologies. The business is also projected to bring in $370,000 in annual recurring revenue for the current contracts.
The $1.4 million price tag also comes with further consideration of up to $1 million to e paid based on total contract values of contracts assigned to ArchTIS as of 31 March 2022.
ArchTIS chief operating officer Kurt Mueffelmann said, “We have worked with the Cipherpoint software team for some time through our existing mutual reseller arrangements. The asset purchase is a logical next step in the relationship.”
“The bolt-on acquisition represents excellent value for ArchTIS shareholders with the delivery of many long-serving, high profile customers and partners, as well as extending markets in Europe and Singapore.
“In particular, the asset purchases will provide ArchTIS with unique data discovery and classification technology that are complementary to NC Protect and can be cross-utilised with our existing technology stack. Moreover, the industry-ready Cipherpoint staff will slot readily into our active EU/America offices and bolster our sales efforts in these markets.”