Innovative software solutions developer archTIS Limited (ASX:AR9) has purchased select assets including customers, technology and the European operations of Cipherpoint Limited’s software division.
The newly acquired software division includes the intellectual property to cp.Protect, an advanced SharePoint on-premises data encryption solution, as well as cp.Discover, a data discovery and classification platform.
Both products complement archTIS’ NC Protect solutions.
Existing cp.Protect and cp.Discover customers include DHL, Bank of Finland, California State University, Arthur J Gallagher, US DARPA, Singapore Power, Singapore Tote and Acronym Media. Cipherpoint reseller NTT Data will continue to provide an ongoing sales channel for the cp products in Germany, Austria, Switzerland and Singapore regions.
NC Protect will provide a migration path for customers moving to Microsoft 365 and Teams, as customers move toward Microsoft’s Cloud or Hybrid platforms.
Specifically, the acquisition will provide a growing suite of datacentric and zero trust architected platforms and products to support Microsoft customer environments for on premises, hybrid and cloud deployments and assist the Company to grow its annual recurring revenues.
We have worked with the Cipherpoint software team for some time through our existing mutual reseller arrangements,” archTIS Global COO and US President, Kurt Mueffelmann, said.
“The asset purchase is a logical next step in the relationship. The bolt-on acquisition represents excellent value for archTIS shareholders (~3.8x current annual recurring revenue) 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.”
The purchase price consists of $1.4M in cash with $200K of the initial purchase price held in escrow until the novation of certain contracts. In addition, further consideration of up to $1M is to be paid based on total contract values of contracts assigned to archTIS as of March 31, 2022.
This additional consideration will be settled through the issue of shares under the Company’s 15% placement capacity after 31 March 2022. Further material terms of the acquisition are set out in Annexure A.
The Cipherpoint software division currently provides $370K in annual recurring revenue for the current contracts and has a deep and growing pipeline across Europe, Asia and the Americas, including a number of government and defence agencies.
The asset purchase is projected to be immediately accretive to the archTIS financials with Cipherpoint staff in Europe (Heilbronn, Germany) joining the organisation.