- Tesserent (TNT) announces a $33 million buyout of two private companies: Pearson Group and Claricent
- Pearson and Claricent have leading positions in the Federal Government market and will help the Tesserent strengthen its government services arm
- Tesserent will pay for the purchases in a mix of cash and scrip, with around half of the total amount to be price before the end of the year and the rest in September 2022
- The two businesses will be integrated into Tesserent’s North Security arm, which leads its Federal Government team
- Shares in Tesserent are up 14.67 per cent to 17 cents each at 10:15 am AEDT
Cyber security specialist Tesserent (TNT) has spiked in early action after announcing a $33 million buyout of two private companies: Pearson Group and Claricent.
Payment for the acquisitions will be made through a mix of cash and scrip, with both Pearson and Claricent to be integrated into Tesserent’s North Security arm, which leads TNT’s Federal Government team.
Tesserent said both Pearson and Claricent have leading positions in the Federal Government market and will help the wider company strengthen its government services business.
Pearson has an unaudited revenue target of $21.5 million for the 2022 financial year, with $4.8 million in earnings before interest, tax, depreciation and amortisation (EBITDA). Claricents has a 2022 financial year revenue target of $2.8 million and $0.75 million in EBITDA.
Tesserent Chair Geoff Lord said the two businesses were a “welcome” addition to the TNT group.
“These acquisitions cement our position as the leading ASX-listed provider of cybersecurity solutions and services into Federal Government and the leading provider of Essential 8 consulting services, as well as contributing to our annual revenue and adding significant recurring EBITDA to the group,” Mr Lord said.
Tesserent said it would fund the purchases with the proceeds from a September capital raise.
Why the buy?
Pearson provides the Essential 8 service to the Federal Government: a set of mitigation strategies designed to give organisations a baseline for cyber protection.
Tesserent said the Federal Government is deploying Essential 8 across all departments and agencies, many with the support of the Pearson Corporation.
Meanwhile, Claricent provides cyber government, risk, and compliance services.
It’s the businesses’ close ties to the Federal Government that piqued Tesserent’s interest in Pearson and Claricent.
The price tag
Tesserent will pay $28.8 million for Pearson and $4.13 million for Claricent, taking the total price tag to $32.93 million.
Around half of the total price for both buys will be paid as a completion payment before the end of the year, with the rest to be paid following the finalisation of Pearson’s and Claricent’s audited accounts, at this stage estimated to be in September 2022.
For the Pearson completion payment, Tesserent will pay $8.64 million in cash and $5.92 million in shares, with 33.9 million shares to be issued at 17.5 cents. For Claricent, Tesserent will pay $2.06 million as the completion payment and $820,000 in shares.
The final payments in September 2022 will be split 60/40 between cash and shares.
Shares in Tesserent were up 14.67 per cent to 17 cents each at 10:15 am AEDT. The company has a $206 million market cap.