has acquired managed security service provider (MSSP) Virtual Information Technology (VIT) for around $1 million.
Otherwise known as VIT Cyber Security, the Tasmania-based MSSP was set up in 2016 to provide managed IT and security services to its home state’s government and enterprise businesses, offering digital forensics and incident response services, identity protection solutions and security, Citrix and Red Hat consulting.
The deal is expected to close around the end of October and will expand VIT’s presence in the Tasmanian market as the security vendor intends to invest into the MSSP's sales team and develop its security operations centre in Hobart.
According to Cipherpoint executive chairman Ted Pretty, the focus of the acquisition is to acquire a business considered complementary to its subsidiary Brace168 — which it picked up in January this year for around $4.2 million — based in a separate market.
As such, it plans to cross sell its solutions in VIT’s home market to cover areas it does not currently service.
“VIT Cyber Security gives [Cipherpoint] the opportunity to leverage their capabilities into the Tasmanian market,” Pretty said. “It will enable us to continue to scale with an integrated offering and build on its increasing momentum in the cyber security market.”
The initial cost of the acquisition consists of $750,000 in cash and 10.2 million Cipherpoint shares voluntarily escrowed for six months from the completion of the deal. As of publishing, Cipherpoint's shares are worth 0.027 cents, so this currently comes to around $1 million in total, but the end result is likely to differ by the time the deal closes.
There is an additional $1 million in shares also up for grabs, split in $500,000 allotments if the company reaches revenue milestones during 2022 and 2023.
In addition, Cipherpoint has also made an executive agreement with VIT’s founder, Mark Hitchcock, for a market based salary and performance rights for various performance milestones.
VIT employees will also be issued share-based incentives under its existing employee security ownership plans.
“We are excited about the prospect of joining the Cipherpoint team at this critical stage of our growth journey,” said Hitchcock.
“In our opinion, together we have the potential to set new standards in cyber security including providing managed detection and response services, security analytics and data protection."
“The ability to leverage this capability to service our customers will allow us to continue to provide best in class service to our clients in the Tasmanian market,” he added.