TIDMCCS
RNS Number : 9187H
Crossword Cybersecurity PLC
09 August 2021
Crossword Cybersecurity plc
Crossword acquires Stega UK Limited
9 August 2021 - London, UK - Crossword Cybersecurity Plc
(AIM:CCS, "Crossword", the "Company" or the " Group "), the
technology commercialisation company focused on cyber security and
risk management, is pleased to announce, subsequent to its
oversubscribed GBP5.0m fundraising, the acquisition of the whole of
the share capital of Stega UK Limited ("Stega") , the threat
intelligence and monitoring company referred to in Crossword's
announcement of 28 July 2021 has completed (the 'Transaction').
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 on an annualised basis, with GBP605,000 revenue
in its most recent full financial year ended 30 November 2020, 75%
of which was recurring revenue. Stega had net assets of GBP49,667
at that date. Cross sell opportunities are being explored with the
Stega's management, alongside operating synergies.
Crossword Cybersecurity has agreed to pay a total consideration
of up to GBP1.8m for Stega. The payments are structured as
follows;
- an initial payment of GBP760,000 in cash, payable in three
tranches; GBP600,000 on completion, GBP80,000 on the first
anniversary of completion and GBP80,000 eighteen months following,
completion;
- an initial payment of GBP200,000 in Company shares, issued in
three tranches; GBP100,000 on completion, GBP50,000 on the first
anniversary of completion and GBP50,000 eighteen months following,
completion;
- On the first anniversary of the Transaction, up to GBP295,000
cash and GBP125,000 in Company shares payable on achievement of a
revenue growth target of 24% during the 12 months following
completion of the Transaction compared with revenue in the most
recent annual accounts, with lesser payments for achievement of 50%
and 75% of the growth target;
- Eighteen months following completion of the Transaction, up to
GBP295,000 cash and GBP125,000 in Company shares payable on
achievement of a growth target of 24% for revenue on an annualised
basis during the six months following the first anniversary of
completion of the Transaction (so for the period 12-18 months
following the transaction completion) compared with revenue in the
most recent annual accounts, with lesser payments for achievement
of 50% and 75% of the growth target; and
- All shares will be issued at a price based on the average
mid-market price for the three months prior to the date of
issue.
Stega was established in November 2016 and has been run by its
CEO Phil Ashley, since formation. Phil and his team will join
Crossword and work alongside Crossword's Consulting team.
Issue of Ordinary Shares
Crossword will issue the vendors 242,016 ordinary shares of 0.5p
each ("Ordinary Shares") at a price of 41.32p per share in
consideration of the initial payment of shares worth
GBP100,000.
Application has been made for the admission of the 242,016
Ordinary Shares to trading on AIM ("Admission"), with Admission
expected to take place on or around 11 August 2021.
Total Voting Rights
For the purposes of the Financial Conduct Authority's Disclosure
Guidance and Transparency Rules ("DTRs"), following Admission,
Crossword will have 74,951,310 Ordinary Shares in issue with voting
rights attached. Crossword holds no shares in treasury. This figure
of 74,951,310 may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in the Company, under the DTRs.
Tom Ilube, CEO of Crossword Cybersecurity plc, commented:
"Following our successful fundraise last week, I am pleased to
welcome Phil Ashley and his team at Stega, to Crossword. Stega's
threat intelligence and monitoring services are a great addition to
Crossword's range of services which help to reduce cyber risks for
our clients.
Stega, Crossword's second acquisition of 2021, will be an
important part of our plans for continuing revenue growth."
Phil Ashley, CEO of Stega UK Limited , commented: "Stega is
delighted to become part of Crossword at this exciting time. We are
looking forward to offering our services to a wider customer base
and using Crossword's solid structure, strong connections and
determined sales team to drive revenue growth."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
Contacts
Crossword Cybersecurity plc - Tel: +44 (0) 20 3953 8460
Email: info@crosswordcybersecurity.com
Tom Ilube, Chief Executive Officer
Mary Dowd, Chief Financial Officer
Grant Thornton (Nominated Adviser) - Tel: +44 (0) 20 7383
5100
Colin Aaronson / Lukas Girzadas
Hybridan LLP (Broker) - Tel: +44 (0)203 764 2341
Claire Louise Noyce
For media enquiries contact:
Duncan Gurney, GingerPR
duncan@gingerpr.co.uk - Tel: +44 (0)1932 485 300
About Crossword Cybersecurity plc
Crossword Cybersecurity plc focuses on the development and
commercialisation of university research-based cyber security and
risk management related software and cyber security consulting. The
Group's specialist cyber security product development and software
engineering teams work with its university partners to develop the
research concept into a fully-fledged commercial product that it
will then take to market. The Group's aim is to build up a
portfolio of revenue generating, intellectual property based, cyber
security products. Rizikon Assurance, Crossword's leading product,
is a SaaS platform that enables medium to large companies to assess
and manage all risks from their suppliers. Nixer CyberML,
Crossword's most recently launched product, is a new tool for
businesses that want to solve advanced security and cybercrime
problems, such as detecting and dealing with compromised accounts,
fraud, and in-application denial of service attacks. Crossword's
team of expert cyber security consultants leverages years of
experience in national security, defence and commercial cyber
intelligence and operations to provide bespoke advice tailored to
its clients' business needs.
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END
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August 09, 2021 02:00 ET (06:00 GMT)
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