Asta Transaction to Significantly Increase Revenue
Asta Transaction to Significantly Increase Revenue
Melbourne, Aug 1, 2018 AEST (ABN Newswire) - Tesserent Limited (ASX:TNT) has signed a binding-terms sheet (subject to various conditions precedent) to acquire Asta Solutions Pty Ltd ('Asta').

Asta is an Information Communications Technology (ICT) company and has more than 200 clients, serviced by 85+ staff located in Melbourne, Sydney and Auckland. Asta has signi?cant expertise in a number of areas important to Tesserent's strategy, including cloud technologies, managed services and the development of blockchain applications.

The cost of the acquisition - 4 x FY18 EBITDA - is expected to result in a purchase price of $3.8 million, which will be met through a combination of shares and cash.

Analyst comment: this transaction is highly accretive, for a number of reasons, including the following.

Increased product offering - to date, Tesserent has focused solely on internet security as a service, but the acquisition of Asta will expand their product offerings to include web and mobile development, as well as cloud solutions and business consulting.

Increased client base - given Asta's 200+ clients throughout Australia and New Zealand, Tesserent's client base will expand accordingly. More importantly, the Asta acquisition enhances Tesserent's scope to encompass small- to medium-enterprise businesses (historically, the company dealt with larger corporations only), which should increase sales of Tesserent's Cyberbiz internet security platform.

Increased revenue - we believe the Tesserent group as a whole generated revenue of around $16 million over the past year (the valuation video above outlines how TSI determined this).

Valuation: we have increased our valuation for Tesserent to $0.26/share (currently $0.07), in the belief that, once the current share purchase plan closes on 6 August (a major overhang on the share price for the past 6 weeks), the takeover is complete (in October) and the new combined revenue is confirmed, the company's share price will re-rate towards our valuation.

To view the video, please visit:

About Tesserent Ltd

Tesserent Ltd (ASX:TNT) is a specialist in managed cybersecurity and networking. Tesserent provides enterprise-grade managed cybersecurity and networking services to corporate customers in Australia and internationally in the UK and Korea. Tesserent provides a 24/7 Security-as-a-Service offer to small and large organisations', giving customers peace of mind that their networks and critical data are protected. Tesserent also provides innovative cybersecurity solutions to small-medium businesses via the CyberBiz suite of services. In July 2018 Tesserent announced the intention to acquire Asta. Together, the companies will offer a powerful suite of end-to-end managed IT security solutions. http://www.tesserent.com


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The Sophisticated Investor

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Adam Kiley
TSI Capital Pty Ltd
E: adam.kiley@tsicapital.com.au

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