Plurilock Security Inc. (TSX-V:PLUR) said it has agreed to acquire certain assets of Atrion Communications Inc, a veteran-owned leading American provider of consulting, IT and cybersecurity solutions for US$3.7 million to be paid through a combination of cash and shares.
The cybersecurity company has entered into the purchase agreement through its subsidiary, Aurora Systems Consulting Inc and said the transaction will enable it to expand its geographic footprint, and facilitate access and ongoing growth opportunities and expansion of its East Coast-American operations.
“The transaction represents our third acquisition as a public company and serves as another milestone in our mission to acquire accretive cybersecurity and IT assets with great customers, capabilities, and distribution channels where we can cross-sell our high-margin solutions to deliver economies of scale,” Plurilock CEO Ian L Paterson said in a statement.
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Atrion is a full life-cycle network infrastructure and security solutions provider, offering procurement services, professional services and solutions integrations, managed services, and cybersecurity consulting.
For its fiscal year ended March 31, 2022, Plurilock noted that Atrion generated approximately US$14.0 million in revenue with a gross profit of US$3.3 million and EBITDA of US$533,300.
The company has a healthy pipeline of major customers, including a Fortune 500 North American provider of food services and facility management, a leading multinational pharmaceutical company and several renowned American hospitals and medical centers, it added.
By leveraging on Plurilock’s zero trust identity technology and strong sales distribution channels, the acquisition will equip Atrion to further serve its customers with leading-edge cybersecurity solutions and expand its footprint in the public and private sectors.
The management team at Atrion will remain in place and will actively participate in an integration plan with Plurilock’s executive management following the closing of the transaction.
"Atrion is very excited to join the Plurilock and Aurora family as it offers us the opportunity to continue working with our long-time customers and the valuable relationships we've cultivated over 37 years in business,” said Dominic Grillo, president of Atrion. “In addition, it gives Atrion access to sell the Plurilock technology, which addresses some of the biggest IT challenges today.”
Transaction terms
Plurilock said it will pay certain vendors of Atrion US$2,000,000 in cash on closing, subject to working capital adjustment; US$500,000 in cash payable 90 days following closing; and 1,285,700 common shares of Plurilock, issuable at closing, and another 1,285,700 shares, issuable one year following the closing at CA$0.30.
The shares are subject to a four-month statutory hold period commencing on closing. US$300,000 of the shares will be held in escrow for 18 months to stand as security for any claims with respect to the representations and warranties of Atrion contained in the purchase agreement.
The agreement also includes future performance-based earnout payments, where up to US$600,000 in cash may be paid to Atrion.
Plurilock is actively evaluating other acquisition targets that will extend its distribution channels, while adding new top-tier customers and competitive technology assets to its business, the company said, noting that it continues to have an active M&A pipeline.
Contact the author at jon.hopkins@proactiveinvestors.com