Transaction Solutions International (TSI) has acquired Sydney-based consultancy firm and Amazon Web Services (AWS) partner Cloudten.
Based in Western Australia and specialised in technology for financial services, TSI had signed a binding agreement to acquired Cloudten in early December for $8.6 million.
The purchase plan has seen TSI make the first payment of $3 million at the completion of the acquisition with future payments scheduled as follows: three payments of $1.5 million the first after 90 days of the acquisition; another after 180 days $1.5 million in 180 days and one after 270 days; with the remainder $1.1 million payment due one year after the acquisition.
Cloudten closed the 2018 financial year ended 30 June with $3.8 million revenue.
According to TSI, Cloudten has a strong balance sheet and has experienced significant growth in excess of 100 per cent year-on-year in the last three years.
Publicly-listed on the Australian Securities Exchange since 2001, TSI owns Sydney-based cyber security firm and IBM partner Decipher Works.
According to TSI, the acquisition of Cloudten is a strong fit with Decipher Works (DWX) and can build on potential synergies amongst technologies.
As part of the agreement, Cloudten's co-founders will remain in the operation of the company for the next four years also having agreed to a non-compete provision in relation to Australia, the United Kingdom and Singapore for the same period.
TSN will not get ownership of 100 per cent of Cloudten straightaway, it is initially entitled to 19 per cent of the Cloudten shares as per the agreement, with the remainder of the Cloudten shares with the relevant percentage of shares to be released from the security upon the corresponding payment of a tranche of the fixed component of consideration.
"We are pleased to welcome Cloudten to the TSN Group," said Gary Foster, chairman at TSN. "Cloudten’s strong business fundamentals provide good cash flow and exciting growth opportunities to TSN.
"We will focus on working with both Cloudten and DWX management to embed best practices into the commercial and operational aspects of the business to prepare it for further growth opportunities," he added.
Cloudten recently achieved the AWS security competency status. The security competency was established in June 2017 and recognises AWS partners who demonstrate security expertise which helps customers achieve cloud security goals.
Attaining the security competency requires partners to undergo a rigorous selection process involving customer references and an independent audit, ensuring that best practices are in use while helping enterprise and government clients meet their unique requirements within the cloud.