LONDON, UK: Crossword Cybersecurity Plc it has undertaken an oversubscribed fundraising by Hybridan LLP of approximately £5.0 million as the company intends to complete an acquisition of a threat intelligence and monitoring services company.
Additionally, Crossword cybersecurity intends to apply the proceeds of the fundraising to increase sales and marketing resource, for product development and support and for general working capital purposes. The placing price represents a 23% discount to the closing mid-price on 27 July 2021.
Crossword has agreed, subject to contract and the placing being complete with the admission of the placing shares to AIM by 3 August 2021, to pay a total consideration of up to £1.8m for the threat intelligence and monitoring company, of which £1.35m is unconditional and £0.45m conditional on performance.
The payments are a mixture of cash and shares, some upfront and some deferred. This unconditional price represents a revenue multiplier of 2.25. The acquisition brings the additional capability of threat intelligence and monitoring services, using its sophisticated in-house platform.
It will bring circa 30 new clients to Crossword, primarily financial sector organisations, taking the total number of fee-paying consulting clients to over 100. The target company is currently breakeven, with 75% recurring revenue. Cross sell opportunities are being explored with the acquisition, alongside operating synergies. A further announcement will be released once the acquisition agreement has been signed.
This pending acquisition will be Crossword’s second acquisition in 2021. Verifiable Credentials Limited was acquired in May 2021 and its product, Identiproof, increased Crossword’s software product portfolio to three. Crossword is now actively taking Identiproof to market, as well as continuing product development. Several public sector tenders directly and with partners are being worked on.
Crossword is in discussions with several commercial businesses on how they might use the identiproof platform to issue verifiable digital certificates, as there is a shift from physical certificates to digital credentials across sectors ranging from digital ticket sales (festivals, concerts, exhibitions), insurance, compliance certificates (standards, accreditations), education and many more.
The successful rollout of Rizikon to membership bodies, including to members of the Chartered Institute of Information Security, has resulted in more than 300 users of Rizikon assessing over 3,750 suppliers.
With membership body agreements recently signed, including with the ICAEW and others imminent, Crossword is targeting over 1,000 users of Rizikon by end 2022. Further details on the membership bodies the Group is in discussions with and opportunities are contained within the Company’s updated presentation referred to below.
The second half of 2021 will see Crossword establishing its subsidiary in Oman as its Gulf region headquarters. This follows the signing of Heads of Terms with a prominent Omani family, Al-Rawahy Holdings. Crossword will roll out all its products and services in Oman.
A MoU has been signed with a major Omani managed service provider to agree to roll out Rizikon in Oman in the second half of 2021.
Crossword Cybersecurity PLC share price
37.00 GBX−2.00 (5.13%)today
27 Jul, 4:30 pm GMT+1 ·Disclaimer
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