Rhipe acquires encryption and cyber security company
Written on the 5 August 2019 by David Simmons
Australian cloud computing solutions business Rhipe (ASX: RHP) has acquired Network2Share for $2 million.
Of interest to rhipe was Network2Share's user-friendly encryption product called SmartEncrypt which rhipe plans to bundle with Microsoft Office365, Microsoft Azure, and other vendor software licences.
"The acquisition will provide rhipe with new and differentiated intellectual property that will be exclusively available in Asia Pacific via rhipe's Platform for Recurring Subscription Management (PRISM)," the company says.
The company's resellers will be able to use PRISM to sell, provision and bill their end users for SmartEncrypt.
According to Rhipe, SmartEncrypt allows companies to easily encrypt files and documents en masse using simple-to-manage encryption keys.
This means even if a network is breached by an unauthorised user, the files they gain access to will be unreadable and unusable.
"The acquisition of SmartEncrypt has been some time in the making," says Rhipe CEO Dominic O'Hanlon.
"Last year rhipe expanded its own PRISM platform and grew service offerings such as 24/7 support-as-a-service.
"The new acquisition of SmartEncrypt will now result in the launch of rhipe's own billable software product that can be sold alongside licences from other vendors."
The new owner says it has already received strong interest for the encryption product in small and medium sized end-user businesses.
Rhipe will spend $2 million on acquiring 100 per cent of Network2Share, with a further consideration of three tranches of $1 million each payable upon reaching sales of 10,000, 20,000, and 40,000 monthly licences.
Once SmartEncrypt reaches 40,000 monthly licences the total consideration paid will be $5 million.
Founded in 2003, Rhipe is a cloud software licencing business that operates in the Asia Pacific region with vendor partnerships with Microsoft, VMware, Citrix, Veeam, Red Hat, Trend Mirco, Symantec and others.
The company is continually expanding in APAC region, and has offices in Sydney, Melbourne, Auckland, Singapore, Bangkok, Manila, Kuala Lumpur, Jakarta and Seoul.
Rhipe's shares have more than doubled over the last year, up from $1.30 a year ago to $2.82 today.
With serious juice in its engine the company has been announcing favourable news lately, especially in relation to its public cloud business.
The group has exceeded half a million Office365 'seats', and continues to see growth in that business, demonstrating its success with the Microsoft product.
In June the company announced that it further upgraded its profit guidance for the 2019 Financial year to approximately $12.5 million.
The board of rhipe currently estimates guidance for FY20 to be approximately $16 million in operating profit.
Shares in Rhipe are up 1.81 per cent to $2.82 per share at 11.45am AEST.
Business News Australia
Author: David Simmons