Senetas says the board of its subsidiary company, Votiro Cybersec Global Pty Ltd, has approved the entry into a definitive share purchase agreement to sell the operational subsidiaries in the Votiro group to Menlo Security Inc., a privately held company incorporated in Delaware that specialises in the development and supply of cybersecurity products. The transaction was closed simultaneously with the entry into the definitive binding agreements.
The transaction involves the sale by Votiro of its wholly owned Israeli-incorporated operating subsidiary, Votiro Cybersec Limited, and its subsidiary entities. Senetas currently holds a controlling shareholding of approximately 55.7% in Votiro.
The transaction proceeds to be received by Votiro will be in the form of 40% cash and 60% as shares in Menlo. Senetas will retain its shareholding in Votiro, which will give it ongoing exposure to the value of the shares Votiro holds in Menlo.
The transaction consideration for 100% of the shares in Votiro Cybersec Limited includes a base consideration of USD37.5 million (approximately AUD60 million), plus the potential for incremental consideration if certain conditions are met.
Approximately 45% of the base consideration is to be deferred for 12 months following completion of the transaction, and its payment remains conditional on the renewal of key customer contracts.
“Votiro Cybersec Limited becoming part of the Menlo business represents a significant opportunity to accelerate the growth of the underlying Votiro business,” said Senetas CEO Andrew Wilson. “Senetas’s ongoing exposure to Menlo via the shares Votiro received as consideration for the transaction also has the potential to deliver substantial upside to both Votiro and Senetas shareholders by providing them with exposure to a far larger and well-financed US-based security company.”
“Strengthened by the acquisition of the underlying Votiro business, Menlo is expected to significantly grow its market share, and we are excited to be an indirect investor in this larger business in the future,” he added. “A key reason we chose Menlo as a partner for this transaction is because it is backed by Vista Equity Partners, Neuberger Berman, General Catalyst, American Express Ventures, Ericsson Ventures, HSBC, and JPMorgan Chase. The financial strength of its backers, and the fact that some were also Votiro’s customers, made Menlo an obvious choice for the growth and development of the Votiro business moving forward.”
“Votiro has also had a very productive commercial relationship with Menlo for some years, and Votiro’s technology fits seamlessly into the Menlo portfolio. There are key synergies between Menlo and Votiro, including a number of large customers that we have in common.”
“We continue to believe in the long-term outlook for Votiro’s business, and Senetas’s indirect investment in Menlo will provide Senetas and its shareholders with an ongoing exposure to future upside,” Wilson said. “We structured the sale to ensure that Senetas would receive what is expected to be a substantial incremental increase in the share consideration as Menlo grows its business.”
