Ansys to buy LAWtrust for R108m
Ansys plans to buy Law Trusted Third Party Services (LAWtrust), for R108.5 million, bolstering its cyber security business.
The diversified digital technology group says it has entered into a letter of intent to acquire 100% of the issued share capital of the information technology developer and provider of cyber and information security solutions.
LAWtrust was founded by Christi and Maeson Maherry and began operations in 2006. Today, it provides services to over 500 clients in the private and public sectors. Its solutions include authentication, encryption, digital signatures and biometrics.
"The acquisition of LAWtrust will enhance Ansys' current cyber security business by introducing strategically aligned products and by providing access to new markets which, in turn, will provide significant annuity revenue," it says.
Ansys says the maximum payment for the acquisition will be R108.5 million. The cash portion will be R88.4 million and the share portion R20.1 million.
"The founders will receive 75% of their payment consideration in Ansys shares and 25% of their consideration in cash, while the remaining shareholders, all external to the business, will receive 100% of their consideration in cash," the company adds.
Ansys recently announced it has repositioned itself as a digital technology solutions provider. This is structured around core competencies in safety and productivity, digital network connectivity, cyber security, defence digital solutions and original design manufacturing.
"A key component of the strategy is to achieve growth both organically and through the acquisition of companies aligned to its core business."
Ansys says the global cyber security market has grown over 35 times since 2005, primarily as a result of an unprecedented increase in criminal activity. Recent reports published by Markets and Markets indicate the cyber security market will grow from $137 billion in 2017 to $232 billion in 2022. Gartner similarly predicts spending on information security, a subset of cyber security and the sector in which LAWtrust operates, will reach $93 billion in 2018.
"The extensive use of authentication, encryption and biometrics in enterprise applications and on the Internet means LAWtrust is actively engaged across 12 solution segments within the cyber security market. The segments in which LAWtrust operates are high-growth segments with a compound annual growth rate in excess of 20%."
Ansys adds the incorporation of LAWtrust's technical team into the Ansys team will allow Ansys to develop and provide an expanded range of solutions to a combined client base.
The net value of the assets attributable to the transaction was approximately R30.6 million as at the year ended 31 March. Earnings attributable to the net assets that are the subject of the transaction stood at R10.6 million for the year ended 31 March.
The effective date of the deal is yet to be confirmed and will depend on when all of the conditions precedent in the definitive sale agreement are met or waived.