Acquisition of CipherPoint Covata is pleased to announce that it has entered into a binding agreement to acquire all of the issued capital of CipherPoint Software Inc. (CipherPoint).
CipherPoint operates with resources in Denver Colorado, Austin Texas, and San Diego California.
Founded in 2010, CipherPoint provides data-centric audit and protection solutions which enable companies to search for and discover where sensitive information resides within their organisation, and secures unstructured information in platforms such as Microsoft SharePoint, Office 365, Google Drive and file servers. CipherPoint’s data security suite (“CipherPoint Eclipse”), allows organisations to locate sensitive data, encrypt that information, centrally manage permissions to protect against unauthorised access, and log all permitted and denied access requests to secured sensitive data.
The acquisition consideration is predominantly stock based and any cash costs of the acquisition will be met from existing reserves. Further information on CipherPoint, and the terms of the acquisition are included in the annexure to this announcement. It is anticipated the acquisition will complete on or about 25 August 2017.
The potential benefits from this transaction include:
key technology including extensive data discovery tools, protection of SharePoint files, Microsoft integrations and an API translator that will form part of Covata’s data security platform (DSP); a strong core team; the acquisition of marquee customers including US Army, Arthur J. Gallagher & Co. DARPA, a US Space agency, Singapore Government agency and an industry leading partner in Dimension Data; faster integration with other Microsoft applications; and, greater geographic reach into the US, Europe and Asia.
CipherPoint recently launched its General Data Protection Regulation (GDPR) service offering to help meet European Union (EU) GDPR compliance. The EU GDPR applies to businesses both within and outside the EU that collect personal data belonging to EU citizens. This will benefit all of Covata’s global customers with EU GDPR exposure and also Covata’s Australian customers as they begin to prepare for mandatory data breach notification legislation to take effect in Australia within the next 12 months.
“The acquisition of CipherPoint will, on completion, represent a step change in delivering Covata’s strategy to become a leading DSP provider, and enabling customers to seamlessly secure information as it moves among data centre, private and public cloud environments. CipherPoint’s existing integrations into the Microsoft stack will improve integration with key applications used by our customers”, said Ted Pretty, MD and CEO of Covata.
CipherPoint’s five US-based employees will join Covata’s existing team. Milestone based components of the consideration payable to the CipherPoint vendors are dependent on CipherPoint delivering at least US$300,000 of revenue in the six months to 31 December 2017, and a second separate milestone based on CipherPoint delivering at least US$500,000 in revenue in the 12 months from 1 July 2017 to 30 June 2018.
Data Security Platform – Expanded & Enhanced Strategy
Covata will enhance its data security offering by building and deploying an integrated data security platform (DSP), or data-centric audit and protection platform. Our DSP platform (Covata Secure) is an evolution of the approach described in Covata’s EGM Presentation on 5 April 2017. The expanded offering includes features such as sensitive data discovery, access and policy control, classification, activity monitoring, data loss prevention, user behaviour analytics and GRC (Governance, Reporting, Compliance) reporting. The new platform will be able to be deployed in the Microsoft Azure public cloud, in private and hybrid clouds, or on-premises.
According to Gartner, “By 2020, data-centric audit and protection products will replace disparate siloed data security tools in 40 per cent of large enterprises, up from less than 5 per cent today.” Gartner also predict that Platform and AI are 2 of the 3 megatrends by 2020 – Covata is well placed to leverage these trends.
Mr Pretty said, “Covata’s pedigree as a data security company with well-developed IP sees us perfectly placed to advance from our secure collaboration product to become a leading DSP company. Covata Secure will enable customers to discover sensitive data, implement appropriate data security controls, ensure uniform enforcement of policies and significantly limit the impact of data breaches.”
(20min delay)