archTIS completes "transformational" merger with Nucleus Cyber

archTIS Ltd has completed its merger with Nucleus Cyber following the issuance of securities as the final instalment of deferred consideration due under the terms of the merger. The move follows continued customer product adoption, technology innovation, customer satisfaction, sales distribution growth, market awareness and system integration between the entities. archTIS’ consolidated technology offerings now solve a range of secure collaboration challenges - from secure access to top-secret defence communications between warfighters in the battlefield and to securing protected supply-chain information between leading defence industrials and educational research institutes in communicating with defence and intelligence agencies. It also helps prevent the potential US$1 trillion in market losses from theft of intellectual property, personally identifiable information and key strategic documents in any type of enterprise. “Transformational combination” archTIS managing director Daniel Lai said: “When we merged the companies in late-2020, we indicated that this would be a transformational combination for our shareholders and our overall market expansion. And that has proven to be the case. “The overall market fit, increase in new customers and partners, retention of existing customers, and the added experience of the Nucleus Cyber executive team has helped archTIS towards becoming the leading cybersecurity software development firm on the ASX. “I could not be any happier with the integration. “We look forward to further scaling this success and exploring other merger opportunities.” Customer and partner validation During the first six months of the merger (Jan-Jun 2021), archTIS achieved more than A$2.35 million of total contract value in sales attributed to NC Protect. This is more than a 470% increase in just a six-month period over the A$500,000 of sales through the entire 2020 calendar year. Sales consisted of multi-year licenses and customer renewals, which are driving annual recurring revenue (ARR) as well as additional licensing into key accounts. Some of the key wins cutting across geographical boundaries include the following: Contracted with an Australian National Security Agency to procure additional NC Protect software licenses and support with a total contract value of A$535,000; Expanded the deployment of NC Protect within an Australian Commonwealth National Security Agency with a total contract value of A$868,000; US National Institute for Health selected NC Protect to secure protected healthcare information; German social accident insurance company Berufsgenossenschaft für Gesundheitsdienst und Wohlfahrtspflege (BGW) selected NC Protect for secure employee and guest access in SharePoint; and A Dubai-based mobile communications company selected NC Protect to secure Office 365/Teams. Opportunity to solve industry challenges Nucleus Cyber global chief operating officer and former CEO Kurt Mueffelmann said: “Having completed over 20 merger and acquisition deals in my career, the integration with archTIS was one of the smoothest. “With our combined complementary products, technologies and talent, we saw an opportunity to solve these industry challenges together on a global scale. “It is a true testament to both teams’ ability to embrace the strategic vision of safeguarding the world’s most sensitive information while tactically executing on the highest levels of customer satisfaction, market awareness and operational efficiencies.” Sales distribution expansion archTIS has expanded its sales team to a global, but focused regional model with key markets in the Americas, including the US Federal and Defence, Europe Middle East and Africa (EMEA), and broadening into New Zealand, Singapore and greater Asia through the Company’s APAC team. During the six-month period, the company also signed 12 new Microsoft and general security reselling partners across all geographical areas and has entered new markets including New Zealand, Taiwan, Latin America and Singapore. The company’s alliance partnership with Microsoft continues to strengthen with a number of Microsoft IP Co-Sell Program wins along with an expanding pipeline of opportunities across large, regulated industries in all geographies. Looking ahead archTIS has smoothly and effectively combined all operations and procedures, including consolidation of accounting, CRM and marketing automation systems, deployment of HR systems and global managerial structural alignment; creating underlying cost savings. By month-end July, archTIS will have also consolidated all branding under the archTIS company, folding NC Protect under archTIS and retiring the Nucleus Cyber corporate brand. The corporate brand consolidation will provide a solid foundation for archTIS to continue its growth path across geographic regions, markets and enterprises while exploring key acquisitions.