The two businesses are owned by Apollo Security Pty Ltd and they service residential and commercial clients.
The acquisition is expected to add $3.2 million annual revenue, which would more than double Threat Protect’s FY2016 total security monitoring revenue of $2.84 million.
Threat Protect paid an option fee of $150,000 which expires on March 31, 2017. If the option is exercised and the acquisition is made, the $150,000 fee will be offset against the acquisition price.
If the acquisition is made, it will be funded from the company’s convertible note funding facility.
The acquisition is a key step in the continued execution of Threat Protect’s acquisition growth strategy and will be the largest acquisition outside of Western Australia to date.
The company expects the acquisition to be immediately earnings per share accretive, and to positively contribute to Threat Protect’s 2H 2017 revenue and earnings.
Following the acquisition, Threat Protect would have annual pro-forma revenue of over $10 million, control rooms on both the West and East Coast of Australia, a base of over 400 resellers.
Furthermore, the company would still have significant funding capacity remaining to continue its acquisition growth strategy.
By purchasing Apollo, Threat Protect can capitalise on its previous expansion into NSW providing a control room presence in Sydney and bolting on significant new monitoring revenue streams.
Shares in Threat Protect are trading up 40% over the past three months, currently priced at $0.026.