Mobile software specialist Globo (LON:GBO) has provisionally agreed to buy the business and assets of a bring-your-own-device (BYOD) and mobile software security provider.
The company to be acquired is based in Europe and is valued at €14mln, but has not been named in the announcement at the request of the sellers.
What Globo could reveal, however, is that the target company offers a set of security solutions for the mobile industry with a strong focus on BYOD and mobile applications security.
The unnamed company has a successful track record with customers in the banking, finance and public sectors, and has built a strong reseller network including telecommunications companies, information technology (IT) solutions providers and mobile technology players, Globo said.
The company's technology, should it be acquired, will fill in gaps in the functionality provided by Globo's GO!Enterprise platform, and will provide instant access to certain additional regulated financial markets.
There is no current overlap between the company's and Globo's personnel and customer bases, Globo revealed.
The target company's revenue is based predominantly on annual recurring licence fees, and has a projected December 2015 year-end IFRS (international financial reporting standards) adjusted EBITDA (underlying earnings) of €900,000, and Globo says EBITDA is projected to grow considerably over the next two years.
Globo said the letter of intent (LOI) to acquire the business stipulates an up-front payment of around €6.5mln, with the remainder hen payable in a schedule of earn-outs based on successful delivery of profitability within the two years immediately following closure of the transaction.
The initial portion of the acquisition will be paid in cash, while earn-outs will be based on a combination of cash and new shares in Globo, which Globo said will provide an incentive for successful integration and performance of the acquired company.
Globo chief executive officer (CEO) Costis Papadimitrakopoulos commented: "I am pleased to announce the signing of this LOI, as we have been acutely focused on this strategic transaction over recent months.
“The addition of both the technology and team will bring substantial benefits to Globo, enhancing our product portfolio with new functionalities and strengthening our solutions' security.”
The acquisition should be completed during October and will be immediately earnings enhancing.
“We continue to evaluate other acquisition opportunities," the Globo CEO confirmed.
The shares rose to 35p from 33p overnight before falling back to 33p.