Thales Australia is poised to acquire all of Tesserent’s shares in a deal worth A$176 million.
Announced on the Australian Securities Exchange (ASX), Tesserent said the two companies have entered into a binding scheme implementation deed for 100 per cent of Tesserent’s shares at A$0.13 per share.
With 1,354,182,116 shares on issue, according to Tesserent’s listing on the ASX, this places the equity of the cyber security provider at $176 million as of publishing, which is to be funded by Thales’ own cash reserves.
Post-acquisition, Tesserent will retain its brand, but its visual identity will include “Cyber Solutions by Thales”, with the multinational defence industry contractor growing its footprint across Australia and New Zealand in the process.
Kurt Hansen, Tesserent CEO, said to ARN that the business entity will remain "fully intact", with approximately 50 people coming from Thales Australia's cyber security business coming over to Tesserent.
He also added that there will not be any employees let go as a result of the deal.
"Our three year growth plan is further accelerated as the combination of Tesserent and Thales would provide advanced services to address cyber security needs in Australia and New Zealand, including in the government, defence and commercial sectors," he said.
"All Tesserent employees and management are required as we continue to accelerate execution of our three year plan.
"Career paths will be further enhanced for all of our people being part of this strong local and global organisation. There will not be any redundancies."
If accepted by Tesserent shareholders and a range of conditions are met, the deal is expected to be completed by the second half of 2023.
However, if either party backs out, a break or reverse break fee of $1.8 million will be incurred.
Tesserent chairman Geoff Lord, said the scheme represents a “significant premium” to the cyber security provider’s recent share price and reflects an enterprise value increase of $225.4 million from 31 December 2019.
“Furthermore, the Share Scheme enhances outcomes for our customers, suppliers, and staff,” he said. “Tesserent’s customers are expected to benefit from Thales’ enhanced product suite, global service capabilities and the acceleration of Tesserent’s existing growth and customer service strategy.
“As a result of the share scheme, Tesserent staff are further expected to have increased opportunities to develop new skillsets and access to new networks including international mobility to further advance and grow their careers.”
Meanwhile, Thales Australia CEO Jeff Connolly claimed that the acquisition would enable Thales to become a leader in cyber defence in Australia and New Zealand.
“The Tesserent team will have access to global expertise and a strong balance sheet to provide local Australian and New Zealand businesses both a sophisticated and wide cyber security offering in a fragmented market,” he added.
Tesserent ended its financial year for 2022 with net profit losses almost doubling, from $4.5 million to $8.8 million .
However, Tesserent’s total sales turnover increased by 71 per cent to A$166 million, while statutory revenue grew by A$113 million, a rise of 50 per cent from 2021’s A$67.4 million. Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 94 per cent from $9.6 million to A$18.6 million.