Thales to acquire Tesserent for $176m

French defence company Thales is set to acquire ASX listed security vendor Tesserent for $176 million.

The two companies have entered into a binding scheme implementation deed (SID) under which it is proposed that Thales acquire 100 per cent of ordinary shares in Tesserent, at $0.13 each.

Once the deal is complete, Tesserent will become the lead cyber security provider for Thales’ customers in Australia and New Zealand.

Founded in 2015, Tesserent provides cyber consulting for government and defence sectors, with a 2022 turnover of A$185 million and approximately 500 employees over nine offices.

Meanwhile, Thales’ offerings include sovereign protection products, cyber security services  and security products around the CipherTrust Data Security Platform the SafeNet Trusted Access Identity & Access Management.

After the acquisition, Tesserent will retain its brand, albeit as a Thales company.

Tesserent chief executive Kurt Hansen said that together with Thales, the two companies will address growing cyber security needs in Australia, including those of the government and defence sectors.

Thales Australia chief executive Jeff Connolly said the acquisition of Tesserent and its highly skilled team of cyber experts, combined with the French-owned company's system engineering experts will establish an Australian/New Zealand leader in cyber defence able to best protect the country and its national infrastructure from cyber threats.

 “The Tesserent team will have access to global expertise and a strong balance sheet to provide local Australian and New Zealand businesses both a sophisticated and wide cybersecurity offering in a fragmented market," Connolly said.

 “After the acquisition of S21sec, Excellium and OneWelcome in Europe in 2022, we continue to accelerate our global cybersecurity strategy and consolidate our leadership in cybersecurity, both for critical infrastructure as well as multinational companies,” he said.

In February this year, Tesserent acquired Brisbane headquartered infosec training company ALC Group in a $5.8 million deal, and the company operates nationwide and in New Zealand, Singapore and Malaysia.

In late 2021, Tesserent acquired Canberra-based IT services firms Pearson Corporation and Claricent for a combined $33 million to bolster its federal government business. 

The company also acquired Sydney-based Loop Secure in August 2021 for $13.4 million in cash and stock, to strengthen the capabilities of its Cyber 360 security platform. 

In April 2021, Tesserent completed its $10 million acquisition of Sydney MSP Secure Logic.

Acquisitions in 2020 included Sydney-based cloud services company iQ3 for $17.2 million in cash and shares, Melbourne and Canberra-based security consulting firm Seer Security for $5 million and Tesserent stock and managed security service providers Airloom and Ludus Cybersecurity.

The transaction is expected to be completed during the second half of 2023, and is subject to regulatory approvals and other customary closing conditions.

Apart from shareholder approval, the implementation of the share scheme remains subject to certain other customary conditions including Australian Foreign Investment Review Board and New Zealand OIO approval and court approval.

It also requires Tesserent retains at least 85% of its key management during the period leading up to court approval of the scheme.

The transaction will be fully funded by Thales ’own internal resources and cash reserves, which at the end of 2022, stood at €5 billion.