to bring Crossword's product portfolio to five offerings
21 December 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, today announces that it has signed heads of terms to acquire a cyber threat company which, on completion, would bring its portfolio to five cyber security offerings alongside its cyber security consulting business. Crossword will now focus its full attention on marketing and selling its product portfolio and consulting services to scale up the business.
Crossword has agreed, subject to contract, to pay a total consideration of £1,529k for the cyber threat company, in a mixture of cash and shares, some upfront and some deferred. This price represents an annual recurring revenue multiple of 5.25. The acquisition brings additional SaaS products which provide clients with high value cyber security insight at an affordable cost. It will bring circa twenty new clients to Crossword, across various sectors in multiple jurisdictions. The target company is reaching breakeven, with 90% recurring revenue. Cross sell opportunities will be explored with the acquisition, alongside operating synergies. A further announcement will be released once the acquisition agreement has been signed which is expected early 2022.
This pending acquisition will be Crossword’s third acquisition in less than 12 months and achieves our stated aim of having a portfolio of five products by the end of 2022. Verifiable Credentials Limited was acquired in May 2021 and its product, Identiproof, increased Crossword’s software product portfolio to three alongside Rizikon and Nixer. Crossword is now actively taking Identiproof to market and is currently shortlisted for a major public sector tender opportunity associated with the Identiproof platform. Crossword is also 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.
In August 2021, subsequent to it’s oversubscribed £5.0m fundraising, Crossword completed the acquisition of the whole of the share capital of Stega UK Limited (“Stega”), the threat intelligence and monitoring company. The integration of Stega into Crossword is going well, with many cross-sell opportunities identified. On the back of a successful 2021, with revenue growth achieved expected to be over 40%, at the lower end of market expectations, Crossword is confident that 2022 will see revenue growth accelerate.
Tom Ilube CBE, CEO at Crossword Cybersecurity PLC, said: “We are delighted to have the opportunity to acquire this fast growth company, and to complete our objective of having five cyber security SaaS products in our portfolio almost a year ahead of schedule. The second half of 2021 continued to see excellent client traction with Rizikon, and we are ending the year with more than 500 users of our leading product. With our product portfolio in place, we can now focus our full attention on marketing and selling our SaaS products and consulting services to scale up the business.”
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The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain
Crossword Cybersecurity plc – Tel: +44 (0) 20 3953 8460
Tom Ilube, Chief Executive Officer
Mary Dowd, Chief Financial Officer
Grant Thornton (Nominated Adviser) – Tel: +44 (0) 20 7383 5100
Colin Aaronson / Daphne Zhang
Hybridan LLP (Broker) – Tel: +44 (0)203 764 2341
Claire Louise Noyce
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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, another Crossword 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. Identiproof, Crossword’s most recent product, is the World Wide Web Consortium (W3C) verifiable credentials compatible middleware and wallet technology. 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, including threat monitoring.