SYDNEY, AUSTRALIA: IMG’s subsidiary Mammoth Security has entered into a binding sale and purchase agreement today to acquire 100% of the shares in Adeva from its founders.
Adeva is a national security provider with a highly focused team of technicians that offers a wide range of intelligent products and services, including access control barriers, CCTV recording, innovative alarm systems, business intercoms and integrated solutions.
Mammoth Security will pay $0.5m cash (subject to a customary working capital and net debt adjustment) and issue $2m worth of shares in Mammoth Security (giving the Adeva founders a 12.6% stake in Mammoth Security) as consideration.
Completion of the Acquisition is conditional upon IMG receiving formal approval for the Acquisition from its financiers, as well as certain other customary conditions in IMG’s favour.
Subject to satisfaction of these conditions, IMG is targeting completion occurring on 31 May 2024.
The Adeva vendors will be entitled to an earn out amount equal to 12.6% of 3.5 times the EBITDA of the “Signature Security” group in excess of $3.8m for the financial year ending 30 June 2027, subject to the Adeva founders remaining shareholders of Mammoth Security as at 30 June 2027.
Signature Security will be run as a largely stand-alone business within the IMG group. Dennison Hambling (IMG MD) and Peter Kennan (IMG Chair) will sit on the board, alongside the Adeva founders.
IMG subsidiary Intelligent Monitoring Solutions Pty Ltd (“IMS”) will hold a call option over the Adeva founders’ shares in Mammoth Security, exercisable at any time before 30 June 2027 at a valuation equal to Signature Security EBITDA multiplied by a call option multiple.
Dennison Hambling MD commented: “Bringing the Signature Security brand back to life is an exciting moment for IMG and ADT (which acquired Signature for $171m in 2011 and 11.6x 2010 EBIT) and its staff, many of whom came from the Signature Security acquisition originally.
Putting the existing Mammoth customers, with IMS’s 2x Patriot control rooms (which will enable more value-added solutions – such as video guarding and verification) in the management hands of Adam and Evan and their technicians is a very exciting development, and is anticipated to create a further growth platform for IMG in the in-demand security services space”.