Plurilock Security Inc. (TSX-V:PLUR) has completed the acquisition of certain assets of Atrion Communications Inc., a leading US provider of consulting, IT and cybersecurity solutions, in a cash-and-shares deal.
The cybersecurity group announced the purchase in August and said it would provide the company with additional network infrastructure and security solutions such as procurement services, professional services and solutions integrations, managed services, and cybersecurity consulting.
Atrion's customers include a Fortune 500 North American food services and facility management provider, a leading multinational pharmaceutical company and multiple US hospitals and medical centers.
For its fiscal year ended March 31, 2022, Atrion generated approximately US$14.0 million in revenue with a gross profit of US$3.3 million and EBITDA of US$533,300.
READ: Plurilock Security to acquire certain assets of cybersecurity solutions provider Atrion
The purchase, made via its subsidiary Aurora Systems Consulting Inc, will enable it to leverage additional technology resources and expertise as well expand its geographic footprint on the east coast of the US.
The deal, Plurilock's fourth acquisition to date, will boost its annualised revenue run-rate to approximately CAD$50 million, grow its client network to over 600 and add new talent to its team.
"We are delighted to have completed our fourth acquisition to date and welcome the talented Atrion team to the company with the goal of growing our overall business together," said Ian L. Paterson, CEO of Plurilock.
"Atrion provides us with access to more top-tier customers, resulting in new cross-selling opportunities for our high-margin proprietary solutions.”
"This transaction represents a new milestone for us and we are excited to join Plurilock," said Dominic Grillo, president of Atrion.
Plurilock signalled this may not be the end to its M&A activity, stating it plans to continue evaluating various acquisition targets that will enable the group to unlock revenue and cost synergies and add advanced technology assets to its business.
To help fund the deal, the company has increased a line of credit with Pathward National Association, fka Crestmark, a division of MetaBank National Association to US$4 million from US$2 million.
Transaction details
Under the terms of the deal Plurilock will pay Altrion US$1.92 million cash and issue 1.285,700 Plurilock shares at US$0.30 each.
In addition, Plurilock will pay Atrion US$500,000 in cash payable 90 days after the closing date and issue to Atrion 1,285,700 Plurilock shares, at $0.30 per share, one year after the closing date.
The shares are subject to a four-month statutory hold period commencing on closing.
US$410,000 will be held in escrow for 18 months, subject to early release in certain circumstances, to stand as security for any claims of the company with respect to the representations and warranties of Atrion contained in the purchase agreement.
Future performance-based earnout payments are also included, whereby up to US$600,000 in cash may be paid to Atrion.
Contact the author at jeremy@proactiveinvestors.com