ALMONTE, Ontario, April 02, 2019 (GLOBE NEWSWIRE) -- PRESS RELEASE -- 3 Sixty Risk Solutions Ltd., a company in the risk management and security services sector of the burgeoning cannabis industry, has announced its acquisition of substantially all of the assets and business of INKAS Security Services Ltd., valued at approximately $13.75 million, payable in cash, shares, vendor take-back note and earn-out as described below in the Transaction Summary, and pursuant to the terms of an asset purchase agreement.
The announcement launches the company into a leading role in the cannabis secure transport and cash management service sector nationwide.
Highlights of the Transaction
The Transaction brings together two of the leading security companies in Canada with fully-aligned strategic visions and a strong network of infrastructure. The combined company becomes one of the largest cash management security firms nationally, creating a powerful platform for accelerated growth in Canada and the USA.
- Becomes one of the largest cash management security firm nationally: 3 Sixty has rapidly gained market share within three months of public listing with national capabilities to service additional industries outside of cannabis and cash in transit.
- Extensive distribution network and infrastructure across Canada: 3 Sixty has become a nationwide cannabis secure transport leader to deliver coast to coast service to all our customers. With expanded infrastructure 3 Sixty also brings an additional 16 cannabis operators into our client base. This robust distribution network exceeds the needs of our largest customers, paving the way for increased revenue generating opportunities.
- Enhanced revenue diversification: ISSL brings a diversified revenue mix of non-cannabis customers, some of which are leading financial institutions in Canada. This Transaction will also help to service cannabis dispensaries.
- Route density and enhanced customer responsiveness: 3 Sixty’s workforce and vehicle fleet immediately increases providing enhanced customer responsiveness, cost-saving enhancements, and improved customer penetration across the country with the support of facilities in Alberta, Quebec and Ontario.
- Cost Synergies: As a result of the Transaction, 3 Sixty will see cost synergies from combined auto and cargo insurance, access to secure storage facilities for cannabis storage, additional access to skilled and licensed transport drivers, enable less than a load (LTL) services and secure storage facilities strategically located near major airport hubs. 3 Sixty will also have direct access to armouring additional vehicles through the former parent company of ISSL.
- Purchase price earn-out subject to strong revenue trajectory: $1.75 million of the purchase price is payable only upon ISSL’s business meeting revenue targets of $15 million and $20 million over the first year and second year, respectively, following closing.
Thomas Gerstenecker, CEO of 3 Sixty Securem states, “In very short order, and through our vision to directly focus on the cannabis sector, we have experienced rapid growth from a small regional provider to a nationwide presence with a significant vehicle fleet and secure facilities. With this acquisition we become one of the largest cannabis sector secure transportation outfits, and one of the largest cash management operators in Canada. This speaks volumes to the growth of the cannabis industry and the demand for focused and dedicated services. We are excited and pleased to welcome ISSL to continue the push for an even greater future.”
ISSL was identified early on as an organization offering complementary philosophies, business goals and resources, and a mix of clients including a cannabis sector customer list that had grown to an impressive market share of 16 operators. Key highlights of ISSL’s services that will broaden 3 Sixty’s services include:
- secure cash transportation and processing,
- ATM processing;
- armed security and vault storage service, and
- integrated technology innovation alongside a robust industrial truck and safe manufacturing capability.
ISSL Chairwoman Margarita Simkin notes, “This is truly a win-win for our company, the Canadian security sector, our clients, partners and stakeholders alike. Today’s announcement means our team will continue to build momentum and continue to provide exemplary service across the nation and hopefully beyond. We are very pleased to share this vision with the team at 3 Sixty and anticipate truly exceptional results.”
“In conclusion,” says Gerstenecker, “today’s news propels us to where we can meet the challenges and needs of any national cannabis operator regardless of size and operational complexity. Our strategic plan is on-track and firmly focused on delivering results for our customers, partners, stakeholders and employees while building shareholder value as a trusted leader in this exciting industry.”
Transaction Summary
The terms of the Agreement provide for a purchase of substantially all of ISSL’s assets for an aggregate purchase price of $13.75 million, subject to adjustment, including a $1.75 million earn-out payable in common shares of the company upon the purchased business meeting revenue targets of $15 million and $20 million in the first year and second year, respectively, following closing. The share consideration payable to ISSL, representing $5.5 million of the Purchase Price, is subject to a holdback pending the company obtaining certain customer consents to the Transaction and will be satisfied, upon receipt of such consents, by issuance of up to 9,166,666 common shares in the capital of the company. $2 million of the Purchase Price was satisfied by the issuance of a vendor take-back note to be repaid on a quarterly basis over a two year period following closing. The balance of the Purchase Price, being $4.5 million, was paid in cash.
