Australian cybersecurity provider Tesserent (ASX:TNT) reports its subsidiary Tesserent Academy has completed the acquisition of Australian cybersecurity training business ALC Group.
The company reports it acquired ALC for a consideration of $5.8 million, which was based on 4 times the sustainable earnings, with an earnout amount of 1.5 times on incremental earnings delivered in FY23.
Tesserent says this acquisition is part of its strategy to build a profitable growth business in the cybersecurity training space in the Australasian market, and develop a pipeline of ‘high-quality’ cybersecurity talent to the Tesserent business and to key clients by delivering foundational training programs, as well as advanced training programs to graduates and lateral members entering the cyber industry.
This acquisition will also further the company’s profile by addressing a talent shortage in the cyber market by providing additional work experience services to bridge the gap between client needs and cyber talent.
ALC currently provides certified training courses to about 3,600 delegates per annum, and administers the associated exams across 10 accreditation bodies which will be integrated and form a core part of Tesserent Academy’s offering moving forward.
Tesserent also reports ALC was awarded a ‘significant’ volume contract with the government this month to provide a cyber capability uplift. This training will ‘positively’ impact the current cyber capability and provide in-house and virtual interaction with certification training for key staff across various state and local government teams.
The company also notes it is on track to reach its 2023 turnover target of $200 million by June, and is now setting a phase two ambition to reach an annual turnover run rate of $500 million by the end of FY26.
This projected growth is supported by a recent strategic review undertaken by Tesserent in February 2023 which evaluated the company’s current service offering, operational structure, technical and non-technical resources, and outlook for the market and the business over FY24 to FY26.
Tesserent reports this review identified and assessed numerous organic growth initiatives and accelerated growth initiatives that the business expects to implement in the short to medium term.
These initiatives include accelerating key software development projects within existing BUs under a Tesserent Innovation focus to develop and commercialise the company’s own intellectual property (IP), refresh the marketing strategy for the business to improve marketing efficacy, growth in Security Operations Centre (SOC) capability and scale, and improved cross selling processes and capabilities.
Other initiatives identified include executing to a functional organisation for sales, marketing, capabilities, and realigning finance and other support functions to improve efficiency; review and benchmark pricing of service offerings to ensure appropriate day rates and margin recovery for technical capability delivered; and reviewing options for automation in processes and reporting to increase operating efficiencies and enhance margins.
It also identified initiatives such as investing in key strategic partnerships to develop new sales channels and market offerings, increasing focus on the defence sector given the increased projected Australian Defence Force (ADF) spend on cyber; and expanding the Tesserent Academy business following the acquisition of ALC training as a profit centre, and a development engine for brining new cybersecurity talent into the company.
Tesserent reports it will continue to review potential acquisitions which may present themselves to the market, and ensure they fit into the overall strategy and value proposition of the company.
Tesserent is an Australian cybersecurity provider that offers organisations in Australia and New Zealand the capability to defend their digital assets against cyber attacks.
The company’s Cyber 260 strategy utilises a range of products from ‘world-leading’ cybersecurity vendors to deliver a ‘comprehensive’, and tailored cybersecurity solution.
Companies acquired by Tesserent include Rivium, Pure Security, North, Seer Security, Airloom, Ludus Cyber Security, iQ3, Lateral Security, Secure Logic, Loop Secure, The Pearson Corporation, and Claricent.