Spirit Technology Solutions, an esteemed Australian telecommunications and managed IT services group, has formally declared its acquisition of the cyber security technology company InfoTrust for a substantial sum of $34.6 million. This strategic move is anticipated to fortify Spirit’s standing within the cyber security market and extend its footprint in key urban centres such as Sydney and Melbourne.
The acquisition agreement stipulates that Spirit will remit $14 million in cash and $14 million in Spirit shares priced at 4.6c each to InfoTrust, with an additional disbursement of $6.6 million in cash scheduled over 18 months. Furthermore, the integration of InfoTrust with Spirit’s existing cyber security division is forecasted to yield synergies in excess of $1.4 million in FY25.
InfoTrust, founded in 2014 under the leadership of CEO Simon McKay, has achieved noteworthy growth, boasting a robust compound annual revenue growth rate of 39%. The company is poised to deliver unaudited EBITDA of $4.4 million in FY24.
McKay, esteemed as a ‘well-regarded cyber security market expert’ with over a decade of industry experience, is set to join Spirit’s board alongside co-founder Dane Meah. In the words of Spirit CEO Julian Challingsworth, the acquisition is poised to enhance the company’s cyber security capabilities and contribute to the realization of its ambition of evolving into a premier provider of contemporary and secure digital workplaces in Australia.
To fund this transformative acquisition, Spirit has recently concluded a $16 million share placement to 263 Finance Pty Ltd, a noteworthy stakeholder in the company. Despite a reported downturn in business confidence among its SME clients, Spirit’s cyber security division posted an underlying EBITDA of $621,000 in the period. Financially, Spirit reported a statutory loss of $5.2 million for the period, down from a loss of $7.79 million a year earlier. Preliminary unaudited group revenue decreased to $57.03 million from $67.29 million, with first-half underlying EBITDA amounting to $160,000, a drop from $3.98 million.
Subsequent to the announcement of the acquisition, Spirit Technology Solutions’ shares experienced a notable surge, trading at nearly 12 per cent higher at 6.6c at 11:55am (AEDT).
In summary, the acquisition of InfoTrust represents a pivotal juncture for Spirit Technology Solutions as it seeks to broaden its cyber security portfolio and fortify its position in the Australian market. Notwithstanding a lukewarm performance in the first half of FY24, the company retains a positive outlook on the potential growth prospects engendered by this acquisition.
References:
– Spirit Technology Solutions
– InfoTrust
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