Covata (ASX:CVT) has acquired the underlying data classification technology from German information management vendor Dataglobal for €1 million.
The two companies will also share sales leads and collaborate on channel efforts.
Covata recently demonstrated its broad industry coverage and geographic reach in being awarded three contracts across the US, Europe and the United Kingdom.
The combined contract value was in the order of $250,000, making these transaction significant given they represent more than 50% of fiscal 2017 sales which totalled $424,000.
Accelerating the growth of Covata’s data security platform
It is worth noting that Dataglobal is a provider of enterprise information management and archiving solutions for over 550 major corporations across 40 countries.
The new deal with Dataglobal is expected to accelerate the speed and reduce the cost of development of Covata’s data security platform.
Dataglobal’s offerings link with all forms of data, whether stored on premises, hosted privately or in public cloud environments, such as Microsoft Azure and Amazon Web Services (AWS).
Investment is expected to be recouped quickly
Covata will pay Dataglobal €1 million for the intellectual property acquisition, with payments spread and paid over FY18 and FY19, although the initial integration is expected to only take three-to-four months.
The company will seek to quickly recoup this investment from avoided internal development costs, incremental Covata product sales and revenues from reselling Dataglobal’s products.
Morning! Covata's Sydney team gathering for the daily morning meeting and modelling our new caps pic.twitter.com/iOmf1499KR— Covata (@Covata) January 30, 2018