Crossword Cybersecurity PLC (AIM:CCS) (AIM:CCS) has announced that the £1.8mln acquisition of Stega UK Ltd has been completed.
The cybersecurity and risk management firm said Stega will bring threat intelligence and monitoring services to the wider group, alongside around 30 new clients mostly in the financial sector, taking the total number of fee-paying consulting clients to over 100.
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Stega is currently breakeven on an annualised basis, with £605,000 revenue in its most recent full financial year ended 30 November 2020, 75% of which was recurring. It had net assets of £49,667 at that date.
The AIM-listed company made an initial payment of £760,000 in cash to be paid in three tranches – £600,000 on completion, £80,000 on the first anniversary of completion and £80,000 after eighteen months.
Similarly, £200,000 are being paid in shares, also in three tranches.
The sellers will receive up to £295,000 cash and £125,000 in shares if Stega achieves revenue growth of 24% over the course of next year, or a lower amount if it misses the target.
All shares will be issued at a price based on the average mid-market price for the three months prior to the date of issue, Crossword noted.
Stega was established in November 2016 and has been run by its chief executive Phil Ashley ever since. Ashley and his team will join Crossword and work alongside the consulting team.
“Stega's threat intelligence and monitoring services are a great addition to Crossword's range of services which help to reduce cyber risks for our clients,” said chief executive Tom Ilube in a release.
“Stega, Crossword's second acquisition of 2021, will be an important part of our plans for continuing revenue growth."