Australian cloud services vendor Bulletproof announced today that it will pay up to AU$3.9 million in cash and shares to acquire Sydney-based cloud consulting company Pantha Corp.
Pantha Corp, based in Manly, is a consulting partner with Amazon Web Services, with a history in DevOps and cloud deployment for major enterprise customers, including AAP, Red Balloon, and Sydney Airport Corporation -- a project it has worked on with Bulletproof for years.
Under the terms of the deal, Bulletproof has paid AU$0.8 million in cash to Pantha Corp from its existing cash reserves of around AU$5 million, with the company's owners potentially receiving further performance-linked payments of up to AU$3.1 million, split evenly between cash and shares, to be paid over the next 18 months or earlier.
Those performance-related payments are payable as a 50/50 mix of cash and scrip in Bulletproof. The targets rely on whether Pantha Corp brings material additional value to Bulletproof, including acquiring new professional services and consulting customers, and growing profitable revenues.
A material part of the targets outlined in the deal is based on the successful release of new products to the market, which are expected to bolster recurring earnings with additional operating leverage and scalability, the company told its shareholders.
The acquisition is expected to award Bulletproof with approximately AU$4 million of annualised existing revenues, with AU$0.4 million of current run-rate earnings before interest, tax, depreciation, and amortisation (EBITDA).
Bulletproof hopes the acquisition will allow it to generate more revenue from the cloud services budgets of corporate, enterprise, and government customers.
"We are very excited by the opportunities presented by the established enterprise customer base serviced by the Pantha Corp team, as well as the prospective additional revenues from service offerings we will be able to offer our 600-odd customers," said Bulletproof CEO Anthony Woodward.
Woodward said that Bulletproof has already been making inroads into consulting services, launching its own consulting division prior to the acquisition. However, he said that over the long term, both Pantha Corp and the existing consulting division would ultimately become one entity.
"From Bulletproof's perspective, we've talked about looking closely at the consulting space for a while," he told ZDNet. "What's become clear is that a lot of customers are very keen to get into the cloud. They have a lot of applications that are not there now, and they need the consulting to get them into the cloud.
"We have kicked off a consulting division, and in we're in the planning process, looking at how that would work with the acquisition of Pantha Corp. We want to have one consulting unit, ultimately," he said.
For the immediate future, the Pantha Corp name will remain, with its staff of 20 core professional services consultants and operations to be rolled into Bulletproof. Including Pantha Corp's personnel, Bulletproof now claims a 100-person employee footprint globally.
Bjorn Schliebitz, who founded Pantha Corp with Agnes Schliebitz-Ponthus, said that although his company had been open to acquisition in a bid to build its business, Bulletproof was one of the few companies in the local market with which it would have entered into an agreement.
"We were open to an acquisition, but only with the right company, where there was a cultural alignment, and to keep customers first," Schliebitz told ZDNet. "It's something we wouldn't have done with many other companies in the market."
The completion of the acquisition follows an announcement (PDF) on the Australian Securities Exchange prior to Bulletproof's annual general meeting in November indicating that it had signed a non-binding term sheet with a then-unidentified acquisition target.
Woodward said the AU$4.3 million capital-raising effort that Bulletproof underwent in September would allow it to respond "decisively" to acquisition opportunities.