LONDON, UK: Falanx Group Ltd, the AIM listed cyber security company, has entered into an agreement to dispose of its Assynt Strategic Intelligence Division (Assynt) for an estimated cash consideration of £4.6 million to Cross Atlantic Solutions LLC (CAS).
Falanx previously operated as two separate divisions, namely Cyber Security and Strategic Intelligence (through Assynt).
Assynt is a well-recognised and respected business and has a dedicated and expert team in place. However, both service lines and client bases are very different, with cyber focusing on SME’s and Assynt focussed on global corporate and governmental users and, as a result, there has only been limited cross-selling. There is also limited scope for operational efficiencies outside of basic back-office sharing.
Accordingly, the Company believes that its best prospects for future growth are by focusing as a pure play business focused on the fast-developing cyber security market, particularly given the sector’s strong macro-economic drivers which have accelerated since the start of the COVID-19 pandemic.
Cyber security has now become a business essential and not just an optional extra. Falanx Cyber has invested significantly in aligning its services with this market and is now experiencing much greater demand for its penetration testing and cyber security monitoring services, particularly following the launch of its Triarii cyber protection platform.
The Cyber Division’s channel partners are accelerating their requirements and the spin out of N-Able Inc from SolarWinds Inc., which completed in July 2021, only further increase this potential with improved access into their 25,000 MSPs and 500,000 end users.
The net proceeds of the disposal, combined with the recently announced Growth Loan facility with BOOST&Co, will give Falanx greater financial resources to make earnings enhancing acquisitions as well as organic investment in sales and marketing, delivery capability and continued service enhancement and innovation.
Assynt provides market-leading geopolitical reporting and analysis focused on key major emerging markets and overarching global themes. Assynt has been recognised by Chambers & Partners, listed in their 2021 rankings as one of only five firms in their top tier of global geopolitical risk providers. Assynt’s client base includes some of the largest and most recognised global corporate names.
The Assynt Report focuses on the strategic intelligence needs of global corporates (many of which are headquartered outside of the UK), where it has produced over 1,200 reports analysing key geopolitical events in over 40 countries, including specialist analysis of international jihadist trends and more recently the impact on COVID across the world.
In some cases, Assynt’s customers request Assynt’s embedded analysts to integrate Assynt’s geopolitical understanding and business-focused analytical expertise into the host client’s operational capabilities.
Assynt has made good progress in developing its recurring revenue model for the provision of strategic intelligence by the provision of embedded analysts and report subscriptions. In the year ended 31 March 2021 it recorded revenues of c£2.1 million and an adjusted EBITDA of £0.1 million. Assynt made a loss before tax for the year ended 31 March 2021 of £0.06 million.
Falanx Assynt Ltd (including its four overseas wholly owned subsidiaries in the UAE, USA, Hong Kong and Ireland) has been acquired by CAS, a wholly owned subsidiary of Cross Atlantic Solutions Partners LLC, which is backed by funds advised by a US based investment firm focused on investing in information, marketing and tech-enabled services businesses.
Falanx Group Ltd share price
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6 Oct, 5:07 pm GMT+1 ·Disclaimer
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