Plurilock Security Inc. (TSX-V:PLUR) announced that it has acquired all the issued and outstanding shares of Integra Networks Corporation, a leading Canadian enterprise IT and cybersecurity solutions provider.
Since 1985, Integra has been an IT business solutions provider to Canada's public and private sector, focusing primarily on the federal government. Integra served more than 50 organizations over the last three years, with multiple top-tier customers including Shared Services Canada, the Department of National Defence, and the Royal Canadian Mounted Police.
By leveraging Plurilock's zero-trust identity technology and strong sales distribution channels, the company said the acquisition is expected to equip Integra to further serve customers with leading-edge cybersecurity solutions and expand its footprint in the public and private sectors.
READ: Plurilock wins Gold Globee cybersecurity award for its DEFEND zero trust identity solution
In addition, the transaction will enable Plurilock to expand its geographic footprint, facilitate access and ongoing growth opportunities servicing the Canadian government, and expand its East-Canadian operations.
"Foundationally, Integra checked a number of boxes we were looking for in an accretive acquisition,” said Plurilock CEO Ian Paterson in a statement. “With a strong presence in the Canadian federal government with Tier 1 government agency customers, a strong balance sheet, proven sales of C$5 million, 19% gross margin over the last 12 months, and profitable operations resulting from 35 years of experience, we are looking forward to onboarding the team and exploring new synergistic opportunities to scale our combined operations."
Paterson added: "The closing of this Transaction represents our second as a public company and serves as another milestone in our mission to acquire accretive cybersecurity and IT assets with great customers, capabilities, and distribution channels where we can cross sell our high-margin solutions to deliver economies of scale.”
Nagwa Koressa, president of Integra, noted that Plurilock's approach to customer success “is the perfect fit” for Integra's service-focused model.
“This acquisition brings with it a tremendous number of benefits to our loyal team and our customers, including the opportunity to become a part of an award-winning global cybersecurity company that is developing cutting-edge zero trust identity technology," he said.
Transaction details
On March 4, 2022, Plurilock said it entered into a share purchase agreement with Integra and Integra's sole shareholder (Vendor).
Under the deal, the total consideration payable by the company to the Vendor is C$1.2 million. The deal includes C$600,000 in cash payable on closing and 476,190 common shares of Plurilock, issuable at closing (Consideration Shares) at C$0.42 each for a total value of C$200,000. Also, C$75,000 in cash and 178,571 Consideration Shares have been placed in escrow for 12 months to satisfy any indemnification obligations to the company.
Furthermore, the share purchase agreement includes future-based performance-based earnout provisions, whereby up to C$400,000 in common shares of Plurilock (Earnout Shares) may be issued to the Vendor. 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 the announcement of the issuance of the Earnout Shares.
Plurilock said it plans to continue evaluating other accretive and profitable acquisition targets that will extend its distribution channels while adding new top-tier customers and competitive technology assets to its business.
The company currently has an active M&A pipeline. The acquisition strategy includes the October 2021 announcement of the definitive asset purchase agreement of CloudCodes Software Private Limited, a leading cloud security provider based in India. The transaction is currently awaiting Indian regulatory approval.
Given Plurilock's active M&A program, the company plans to use a combination of debt, earn-outs, and rewards-based compensation in addition to cash and common shares to complete new acquisitions in order to minimize shareholder dilution.
Plurilock said it will be hosting an investor webinar tomorrow, Tuesday March 8. 2022, at 2.00pm EST to discuss the acquisition, with registration via the following link: https://us02web.zoom.us/webinar/register/WN_87h3630MQiqEKsgfFPbUDA
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