Managed security and networking services provider Tesserent is building upon its cyber security business, spending $3.5 million on buying Melbourne-based enterprise security specialist and Splunk reseller Rivium.
The purchase price will be made up of $1.5 million in cash and scrip offering 17.55 million shares at $0.10 per share.
The acquisition will see Tesserent add Rivium’s Security Information Event Management (SIEM) and insider threat capabilities to its suite of cyber security offerings. Rivium has offices in Victoria, NSW, Queensland and ACT.
The purchase will be earnings accretive for the Australian Securities Exchange listed entity, with Rivium forecasting revenue of $4.4 million for the 2019 financial year and EBITDA of $650,000.
Tesserent CEO Julian Challingsworth said the acquisition of Rivium was the first step in growing its experience and capability within its cyber security business via acquisition.
“In a sector that remains fragmented, it provides Tesserent with an outstanding opportunity, and we expect to continue this momentum with additional acquisitions in the short term,” Challingsworth said.
Rivium CEO Robert Silver said it identified synergies with Tesserent, allowing it to boost its marketing initiatives, improve its offerings to new and existing customers as well as growth opportunities.
“We have generated strong growth in the Rivium business in recent years, but saw an opportunity to accelerate our growth by consolidating alongside a company complements what we do,” Silver said.
In March, Tesserent put a hold on its $3.8 million acquisition of Melbourne-based Asta Solutions in favour of other “high-value” purchases in the cyber security sector.
The managed security services provider (MSSP) said it had placed the deal, initially announced in August, on hold with the “potential to revisit” it later this financial year amid a “significant” restructure of its operations.
In a change of focus, the publicly-listed company said it intended to pursue “numerous” acquisitions in the cyber security industry, raising more then $2.2 million in investor funding this financial year to do so.