Bulletproof buys Pantha Corp

Pays $800,000 upfront, connected to up to $3.1 million in performance-linked payments

Cloud services company Bulletproof has acquired the business assets of Pantha Corp.

Pantha Corp is a major consulting partner with Amazon Web Services and has extensive experience in DevOps and Cloud enablement for major enterprise customers.

Bulletproof paid $800,000 cash to Pantha Corp, from existing cash reserves of around $5 million.

The acquisition brings approximately $4 million of annualised existing revenues to the company, with $400,000 of current run-rate EBITDA.

The owners may earn further performance-linked payments of up to $3.1 million split between cash and shares - to be paid over the next 18 months (or earlier, if targets are achieved earlier).

The acquisition allows the company to capture more revenue from the Cloud Services budget of corporate, enterprise and government customers.

The combined business is expected to yield additional growth in managed services as further application workloads are assessed and migrated to the cloud through the extended service offering.

Pantha Corp’s product development capabilities will also help the company bring more application-specific and complex management services to the market.

Bulletproof chief executive, Anthony Woodward, said the he was excited by the opportunities presented by the established enterprise customer base serviced by the Pantha Corp team, as well as the prospective additional revenues from service offerings.

“The Pantha Corp team have an established track record in the space. They have been a Bulletproof partner organisation on a number of key clients already, are a highly regarded Amazon Web Services partner, and their core DevOps culture is in tune with Bulletproof’s own strength in this area," he said.

"The Pantha Corp team also has skills in many enterprise web and digital application platforms.

"We expect the sum of the parts to create an extremely valuable, cohesive whole that significantly increases shareholder value.”

In addition to the upfront payment of $800,000, the deal includes a number of performance based hurdles to allow the owners to earn up to a further $3.1 million.

Those performance-related payments are payable as a 50:50 mix of cash and scrip in the Company.

Shares will be issued based on a $0.30 issue price, with a maximum of 5.2 million shares issued if all hurdles are met.

Bulletproof anticipates that the deal will be strongly earnings per share (eps) accretive, with the initial payment representing some two times EBITDA, and total consideration (if all performance hurdles are achieved) of the order of four times overall EBITDA growth brought to the Company.

According to a company statement, the targets are linked to measures where the Pantha Corp business is expected to bring material additional value to the Company, including acquiring new professional services and consulting customers for the Company - growing profitable revenues.

A material part of the targets is based on the successful release to market of new products, which are expected to significantly bolster recurring earnings with additional operating leverage and scalability.

All the measures are benchmarked over three consecutive half-year periods corresponding with the audited results of the company, and must be achieved by the end of June 2016.

Any target not met by that time will have its corresponding payment forfeited.

Pantha Corp Founders to bring significant strategic value With a background in consulting from the larger-scale European market.

Pantha Corp co-founder, Bjorn Schliebitz, will lead Bulletproof’s Professional Services group.

While co-founder, Agnes Schliebitz-Ponthus, will head up the Company’s recently created product development division to accelerate the strategy of delivering high value managed service platform products to the cloud services market.

Pantha Corp's team of 20 core professional services consultants brings a large increase in cloud consulting capability to bear on the Company’s 600 existing managed services customers, and expected 100-per-year new customers. Following the transaction, Bulletproof will have almost 100 staff across the various business groups and geographies.

Pantha Corp founder and CEO, Bjorn Schliebitz said, the company had worked with the Bulletproof team on large scale complex projects such as for Sydney Airport Corporation for a number of years.

"We are excited by the significant opportunity that matching Pantha Corp’s leading consulting and product development capabilities with the industry leader in managed cloud services brings to corporate, enterprise and government customers as they go on the transformative cloud migration and business re-engineering journey," he said.

"We couldn’t be happier about being part of the nation’s leading Cloud Services story and we can’t wait to add further value to the stellar Bulletproof business.”