ArchTIS Limited has acquired Microsoft SharePoint-related software assets from Cipherpoint Limited. The deal's valuation is roughly 3.8X to 7X annual recurring revenue (ARR), based on various earn-out targets, according to ChannelE2E calculations.
This is technology M&A deal number 594 that ChannelE2E has covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.
ArchTIS gains a Microsoft SharePoint protection solution, a data discovery and classification platform, certain customer contracts, along with technology and European operations. The acquired products complement ArchTIS’ own data discovery, compliance and protection software (known as NC Protect), the buyer says.
Meanwhile, Cipherpoint will now focus exclusively on managed security services. Also, Cipherpoint reseller NTT Data will maintain its ongoing arrangements for the cp products in Germany, Austria, Switzerland and Singapore regions, archTIS said.
According to this Cipherpoint disclosure, ArchTIS will pay:
- $1.4 million in cash;
- $200,000 in escrow; and
- a potential $1 million in deferred consideration based on various financial targets.
Meanwhile, ArchTIS says the acquired assets generate roughly $370,000 in annual recurring revenue. Roll all the figures together, and ChannelE2E arrived at that 3.8X to 7X ARR valuation.
archTIS Acquires SharePoint Data Protection Software: Executive Perspectives
Kurt Mueffelmann, global COO and U.S. president, archTIS, commented:
“We have worked with the Cipherpoint software team for some time through our existing mutual reseller arrangements. The asset purchase is a logical next step in the relationship. The bolt-on acquisition represents excellent value for archTIS shareholders (~3.8x current annual recurring revenue) with the delivery of many long-serving, high profile customers and partners, as well as extending markets in Europe and Singapore. In particular, the asset purchases will provide archTIS with unique data discovery and classification technology that are complementary to NC Protect and can be cross-utilised with our existing technology stack. Moreover, the industry-ready Cipherpoint staff will slot readily into our active EU/America offices and bolster our sales efforts in these markets.”
Steven Bliim, executive director, joint company secretary and COO, Cipherpoint, said:
“I am excited about this transaction, especially in its potential to deliver growth opportunities for both businesses in addition to the sales and support systems already well established in archTIS. With a number of new pipeline opportunities already underway, I look forward to further cultivating an even stronger working relationship as a member of the archTIS team.”
Daniel Lai, managing director and CEO, archTIS, added:
“I’m pleased to add the Cipherpoint technology, support and sales teams to archTIS. The acquisition clearly demonstrates our fiscal responsibility and our ability to consistently execute on what we have communicated to shareholders and the market around targeting acquisitive growth. We are capital efficient in how we price and evaluate deals and how we’re not afraid to look out of the box for this or other acquisitions.”
Next up, Bliim will join archTIS as VP of business development for Europe, the Middle East and Africa. Ted Pretty, Cipherpoint’s non-executive chairman, will assume the role of managing director and executive chairman.
Valuation inisghts from Joe Panettieri.
