Plurilock Security Inc (CVE:PLUR) (OTCQB:PLCKF) announced Monday its plans to acquire cybersecurity technology company Aurora Systems Consulting Inc for US$1.5 million.
Aurora provides cybersecurity products and services to US clients including federal, state and local levels as well as commercial firms. The group generated revenue of US$28.1 million in 2020.
The deal is Victoria-based Plurilock’s first acquisition since it began trading on the TSX Venture Exchange in September 2020.
READ: Plurilock Security inks OEM deal with Untangl to resell its cybersecurity offerings
Aurora will operate as an additional sales force that will deliver Plurilock's identity assurance solutions to a vast network of clients, Plurilock told investors. The deal will accelerate Plurilock's sales growth to rapidly deploy its high margin software products within regulated industries such as finance, healthcare, and defense in the US, it added.
Plurilock will now have a professional services team, a new office on the West Coast of the United States, a larger market presence in the US cybersecurity industry and an offshore office in India built for quoting government deals. The group will also bring more products and services to its clients without having to add additional vendors.
For Aurora, the deal gives it access to Plurilock’s cutting-edge AI platform, resulting in synergies between Plurilock's and Aurora's technology offerings.
"The acquisition of Aurora will represent a significant milestone in Plurilock's development and in our M&A strategy of acquiring attractive assets that have the ability to scale," said Ian Paterson, CEO of Plurilock in a statement.
"With an established customer base of top-tier organizations, the Aurora acquisition provides us with an opportunity to integrate our higher margin cybersecurity software into their existing solution offering in order to increase sales while expanding their overall margins. We expect this acquisition will rapidly advance our growth initiatives and we are looking forward to working with Philip de Souza and his impressive team as we continue to aggressively build our company."
Deal terms
Under the term sheet, Plurilock will acquire all of the outstanding securities of Aurora for US$1.5 million, payable as follows: US$900,000 in cash on closing, subject to a working capital adjustment; US$300,000 in shares of Plurilock, and a performance-based earnout of US$300,000 in Plurilock shares.
The closing consideration shares will be issued at a deemed price of C$0.54 per share, and the earnout shares will be issued at a deemed price equal to the closing trading price of the common shares of Plurilock on the TSX Venture Exchange on the date prior to announcement of issuance of the earnout shares, subject to a minimum share price of $0.30.
The closing cash payment will be paid from a portion of the cash proceeds raised from Plurilock's recent C$5.1 million private placements that closed in February 2021.
The deal is expected to close by March 31.
Contact Angela at angela@proactiveinvestors.com
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