Publicly listed information security provider archTIS has acquired assets from Sydney-headquartered security vendor Cipherpoint’s European software division for at least $1.4 million in cash.
The assets include the intellectual property to Cipherpoint’s SharePoint protection product cp.Protect and data discovery and classification platform cp.Discover, as well as certain customer contracts and its sales and development staff in Heilbronn, Germany.
Existing customers of the Cipherpoint customers, according to archTIS, include DHL, Bank of Finland, California State University, Arthur J Gallagher, US DARPA, Singapore Power, Singapore Tote and Acronym Media.
The price point of the deal starts at $1.4 million in cash, with $200,000 of the price to be escrowed until the novation of certain contracts. An extra $1 million in archTIS shares is also on offer based on total contract values of assigned contracts to the provider as at 31 March 2022.
Additionally, Cipherpoint reseller NTT Data will keep its ongoing arrangements for the cp products in Germany, Austria, Switzerland and Singapore regions.
As a result of the selling off of its software division, Cipherpoint will shift to focusing on its managed security services business, which includes its recent acquisition of Brace168, and will still retain the right to resell the products, but will not pay for future development, software marketing and support costs.
Cipherpoint COO and executive director Steven Bliim will join archTIS as vice president of business development for Europe, the Middle East and Africa, but will remain on Cipherpoint’s board as a non-executive director. Meanwhile, Cipherpoint’s non-executive chairman, Ted Pretty, will move into the role of managing director and executive chairman.
As a result of the leadership shuffle, ARN understands elements of the COO role will be assumed by Pretty and Tom Carolan, Cipherpoint's current CFO.
According to Pretty, the transaction was seen as “compelling” for the company, with the cash from the sale to be used for future growth in its managed services business, both organically and by potential acquisitions.
“Cash from the sale will be deployed to drive further growth in our managed services business both organically and by potential acquisitions,” he said.
Kurt Mueffelmann, archTIS global COO and US president, added that he has worked with Cipherpoint in the past through existing mutual reseller arrangements, which occurred during his time at cyber security outfit Nucleus Cyber prior to its acquisition by archTIS.
“The asset purchase is a logical next step in the relationship," he said. The bolt-on acquisition represents excellent value for archTIS shareholders (~3.8x current annual recurring revenue) with the delivery of many long-serving, high profile customers and partners, as well as extending markets in Europe and Singapore.
“In particular, the asset purchases will provide archTIS with unique data discovery and classification technology that are complementary to NC Protect and can be cross-utilised with our existing technology stack. Moreover, the industry-ready Cipherpoint staff will slot readily into our active EU/America offices and bolster our sales efforts in these markets.”