TNT future acquisitions

Found this great article from Mergermarket (subscription-only service) which basically lays out TNT's complete strategy.

Currently in due diligence with 4 additional acquisitions that will increase revenue to $75M (our current run rate is $50M after Seer acquisition) and are eyeing off international markets.

The article says that TNT have already have knocked back potential acquirers.

Looks very compelling!

Tesserent [ASX:TNT], an Australian provider of managed cyber security services, is conducting due diligence on four potential acquisition targets and will look to expand into other countries in the Five Eyes network, CEO Julian Challingsworth said.

The Melbourne-based company, with its market cap surging by five times YTD to AUD 156m (USD 111m), could complete the deals as early as the end of September, Challingsworth told this news service. These potential acquisitions, if completed, will increase Tesserent’s revenue run rate to more than AUD 75m, the CEO said.

The company is currently approaching a revenue run rate of about AUD 50m following its acquisition of Seer Security’s Melbourne and Canberra businesses in July, he noted. All four targets are based in Australia, and one of them has offices in North America and the UK, Challingsworth said.

The company is looking to enter other Five Eyes countries down the track, so the potential acquisition could assist in that regard, he added. Apart from Australia, the Five Eyes countries include the US, the UK, Canada and New Zealand.

The CEO told this news service last October that Tesserent would also look to make acquisitions in Singapore to expand in the Asia Pacific region.

That is still the case, but the company has been prioritizing growth in Australia over the past months as there is “so much opportunity working with the federal government and defense”, he said. The Seer acquisition, for example, has strengthened the company’s capabilities in Canberra in providing services to the Australian federal government, law enforcement and defense areas, Challingsworth said.

Tesserent consists of a group of cyber security businesses focused on various areas, among which Pure Security, North Security as well as Seer have been featured in the Australian government’s 2020 “Defense Cyber Industry Capability Report” as cyber security suppliers, the CEO noted.

More attractive

The company has received takeover approaches, but not one is formal, Challingsworth said, adding that the management is simply focused on building the business now, instead of “worrying about a potential takeover”.

The CEO said last October that Tesserent would have to become an AUD 100m-market cap company before talking to potential suitors. At that time, the company’s market cap was AUD 14m. The current size is more attractive, but there is still “a huge amount of growth” left in the business, the CEO said.

The whole sector is also consolidating, with both Tesserent and BGH Capital-backed CyberCX making acquisitions, he said, adding the two would be the largest players in Australia from a pure cyber security perspective.

The company saw its sales cycle slow down initially when the novel coronavirus pandemic hit, but at the same time there is better awareness of cyber security during COVID-19 as more people are forced to work from home, he said.

Tesserent’s Melbourne-based employees are still working from home now, while its offices in Sydney, Brisbane and Canberra are less affected, he added.

by Maggie Lu Yueyang in Sydney

Write to Maggie Lu Yueyang at
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