Archtis (ASX:AR9) share price jumps 8% on cyber security acquisition

Archtis Ltd (ASX: AR9) shares are up 8.33% on Thursday afternoon following the company’s acquisition of global information protection business, Nucleus Cyber. At the time of writing, the Archtis share price is trading at 39 cents after closing yesterday’s session at 36 cents.

What’s moving the Archtis share price?

In contrast to a wider market selloff, investors are today driving up the Archtis share price after the company announced news of its latest acquisition.

Archtis is a Canberra-based firm that specialises in the design and development of products, solutions and services for secure information sharing and collaboration. The company has a broad range of products and service offerings such as:

• Kojensi, a highly secure and trusted platform for sharing sensitive and classified files and document collaboration.
• Axiomatics, a dynamic and externalised authorisation solution. 
• Appsian, a security platform with dynamic control access. 
• Consulting and solutions services for secure information sharing and inter-organisation collaboration. 

Nucleus Cyber provides advanced information protection solutions that prevent data loss and protect against insider threats across the Microsoft Corporation (NASDAQ: MSFT) software suite. Microsoft is the world’s largest supplier of digital collaboration products to government, enterprise and SMEs. Microsoft boasts 115 million daily users of its Teams platform, and the Nucleus Cyber technology solutions operate seamlessly in conjunction with these products. For example, its protection solution provides a simpler, faster and cheaper solution to tailor information protection for file sharing, messaging and chat across collaboration tools. 

Nucleus Cyber’s customers include companies such as Virgin Australia Holdings Ltd (ASX: VAH), the Australian Government Department of Defence and Department of Health, Melbourne Polytechnic and Paramount Pictures. 

Acquisition details 

Archtis will acquire 100% of Nucleus Cyber for a total potential consideration of up to $9.75 million in Archtis shares. The company believes that this acquisition is highly strategic and transformational for its growth trajectory and global presence. Archtis will gain immediate presence in the key North American market, as well as access to the Microsoft business product suite. 

Opportunities for the combined business

The acquisition presentation highlights the company’s initial focus on foundational benefits such as simplifying its combined licensing and revenue model, solidifying its products, stabilising the combined customer base, introducing the Microsoft relationship to Archtis, and developing initial awareness. 

This will position the company in 2021 and beyond to focus more on expansion including a direct regional expansion across the European Union, Middle East and Asia Pacific regions. It will also enable Archtis to expand its product alliance with Microsoft Teams and security platforms as well as delivering lead generation and opportunities within US federal and central governments. 

The Archtis share price has increased 200% in year-to-date trading.

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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