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- rhipe (RHP) has entered into binding legal agreements to acquire 100 per cent of emt Distribution
- The purchase price for the Australia and Asia operations will be an upfront payment of $11 million, with key management entitled to an additional consideration of up to $2 million
- The final terms of the purchase of emt Middle East will be disclosed after 30 June 2021
- rhipe says the acquisition will strengthen its presence in security software distribution and will expand rhipe’s offering to the enterprise market
- The contract is expected to be completed within the next two months
- rhipe shares are up 7.37 per cent, trading at $1.68
rhipe (RHP) has entered into binding legal agreements to acquire 100 per cent of the share capital of emt Distribution.
emt is an Australian cyber security distribution specialist that sources innovative security software vendors and works with channel partners to deliver both on-premise and cloud-based security solutions. It hosts a portfolio of over 15 security vendors that offer cyber security solutions.
The purchase price for the Australia and Asia operations will be an upfront payment of $11 million, with key management entitled to an additional consideration of up to $2 million, tied to the financial performance of the acquired business over the first 24 months.
rhipe is expected to complete the purchase of the Australian and Asian operations over the coming months, with the Middle East operations purchase expected to occur in the first half of next financial year.
emt Australia and Asia saw sales of $19 million in the 12 months prior to the acquisition, delivering underlying EBITDA of $1.9 million. The purchase is expected to increase rhipe’s earnings per share by more than 15 per cent.
The final terms of the purchase of emt Middle East, which has an underlying EBITDA of around $500,000 in the 12 months to December 30, 2020, will be disclosed after June 30, 2021.
All key emt management have been retained, with CEO Richard Rundle now responsible for driving the continued growth of the emt business within rhipe.
The company says the acquisition will strengthen rhipe’s presence in security software distribution and will expand rhipe’s offering to the enterprise market.
It also says it will complement rhipe’s existing cyber security software offering centred around Microsoft’s product stack, and rhipe’s own SMB focussed encryption product “SmartEncrypt”.
“emt Distribution has an incredible track record in delivering software security products and solutions via their distribution channels,” said CEO of rhipe Dominic O’Hanlon.
“By combining emt’s expertise in security with rhipe’s reach, we will be able to offer partners across APAC effective solutions to protect against growing threats around cyber security.”
“We plan to continue investing in the emt business to support its continued growth, delivering emt’s extensive portfolio of vendor security products to rhipe partners, while providing emt partners with access to SmartEncrypt and rhipe security vendor products.”
The acquisition is expected to be completed within the next two months and have a minimal impact on rhipe’s financial performance to the end of the financial year.
rhipe shares are up 7.37 per cent, trading at $1.68 at 12:00 pm AEDT.
