- Tesserent (TNT) has recorded stellar growth from its recently-purchased Federal Government cybersecurity business, North Security
- North Security posted year-on-year earnings growth of a whopping 135 per cent on the back of bolstered Federal Government cybersecurity spending
- Over the 2020 financial year, North earned $1.8 million compared to the $766,000 the year before
- Tesserent bought North Security out in March this year for roughly $5.3 million
- The company has also now completed a $2.2 million earn-out payment to North as part of the deal
- Importantly, Tesserent says given the increased government spending on cybersecurity, North’s growth is expected to continue in 2021
- Shares in Tesserent are up just over one per cent at midday and trading at 36 cents each
Tesserent (TNT) has recorded stellar growth from its recently-purchased Federal Government cybersecurity business, North Security.
Tesserent snapped up North Security, then-called north BDT, for around $5.3 million in March this year after signing a sale and purchase deal back in December 2019.
North is a Canberra-based cybersecurity consultant which lends its cybersecurity services to the Australian Federal Government.
Today, Tesserent said North has posted annual earnings growth of 135 per cent, with $1.8 million in earnings table over the 2020 financial year compared to the $766,000 the year before.
This means North’s earn-out period as part of the March buyout is now complete.
Under the terms of the deal, Tesserent was to pay double the difference between the 2019 financial year and the 2020 financial year earnings as an earn-out fee — in this case resulting in $2.2 million to be paid in a mix of cash and scrip.
Importantly, the North Security growth is being driven by an increase in the Federal Government’s August cybersecurity strategy in which Prime Minister Scott Morrison announced $1.67 billion worth of investment into cyber initiatives over the next 10 years.
This boost to government cybersecurity spending goes hand-in-hand with Tesserent’s increasingly strong reputation in the Canberra market, according to the company, meaning this sturdy growth trend is expected to continue into 2021.
Tesserent Co-CEO Julian Challingsworth said the company is “extremely pleased” that its Canberra arm, led by George Katavic, has been such a strong contributor to the company’s overall performance.
“2020 has seen the company’s enterprise value and share price increase exponentially, resulting in George and his team deservedly achieving their FY20 earnest, significantly exceeding their revenue and earnings targets,” Julian said.
Shares in Tesserent spiked in early trade but have since pared back their win slightly. The company is trading 1.39 per cent higher at 12:58 pm AEDT, with shares at 36 cents each.
Tesserent shares were trading at just 4 cents each at the start of 2020 — representing a year-to-date share price rise of over 800 per cent.