Cybersecurity services firm Cipherpoint has announced it will acquire Sydney-based managed service provider Excite IT for $3.25 million.
Excite IT offers managed IT and security services, cloud solutions and automation technology to enterprises, including customers in the property, logistics, biscuit and snack food industries.
In an ASX announcement, Cipherpoint said the acquisition would extend its capabilities to be able to offer a range of managed security, IT and cloud solutions. Excite IT is also an existing channel partner of subsidiary Brace168.
Excite IT founder Bryan Saba will join Cipherpoint’s leadership team as the group’s new managing director and CEO, while Ted Pretty will continue as executive chairman.
“I am delighted that Excite IT will be joining the Cipherpoint teams. We have had a strategic relationship with Cipherpoint subsidiary Brace168 for some time. I am particularly pleased we will be extending this capability to deliver a broader range of cyber services to our clients,” Saba said.
Commenting on the acquisition, Pretty said, “This acquisition continues Cipherpoint’s momentum as a cyber and cloud services business. We are delighted that Bryan will lead our efforts to grow that business.”
“It is our intention to actively cross-sell the unique capabilities of both Excite IT, Brace168 and VITCS. Cipherpoint will support Excite IT as it continues to focus on growth in FY23.”
The $3.25 million purchase price will be a combination of cash and scrip consisting of upfront, deferred and performance based earn out elements.
Excite IT shareholders will receive $1.25 million cash upon the deal’s completion and $1 million in Cipherpoint shares issued at $0.01 per share, which will be escrowed for six months. An additional $500,000 will be paid to Excite IT shareholders after 12 months, with another $500,000 payable in June 2023 upon meeting earnings targets.
Cipherpoint also reaffirmed its capital raising plans first announced earlier this month to help fund future acquisitions, working capital and growth plans. The company will look to raise up to $1.33 million through a non-renounceable pro rata entitlement offer of 2 new shares for every 3 shares.