Falanx Group sells its Strategic Intelligence Division, Assynt, for £4.6 million

Falanx Group Ltd (LON:FLX), the AIM listed cyber security company, has announced that it has entered into an agreement to dispose of its Assynt Strategic Intelligence Division for an estimated cash consideration of £4.6 million to Cross Atlantic Solutions LLC.


·    Falanx sells its Strategic Intelligence Division, Assynt, for £4.6 million

·    Strong strategic rationale to sell

·    Following the sale of Assynt, Falanx has become a pure play cyber security business

·    Proceeds of Disposal to be used for potential earnings enhancing acquisitions within cyber security, organic investment into sales and general working capital


·    The gross consideration payable by CAS represents an implied value of approximately 0.87 pence per Ordinary Share

Principal reasons for the sale

Falanx previously operated as two separate divisions, namely Cyber Security and Strategic Intelligence (through Assynt). Assynt is a well-recognised and respected business and has a dedicated and expert team in place. However, both service lines and client bases are very different, with cyber focusing on SME’s and Assynt focussed on global corporate and governmental users and, as a result, there has only been limited cross-selling. There is also limited scope for operational efficiencies outside of basic back-office sharing.

Accordingly, the Company believes that its best prospects for future growth are by focusing as a pure play business focused on the fast-developing cyber security market, particularly given the sector’s strong macro-economic drivers which have accelerated since the start of the COVID-19 pandemic. Cyber security has now become a business essential and not just an optional extra. Falanx Cyber has invested significantly in aligning its services with this market and is now experiencing much greater demand for its penetration testing and cyber security monitoring services, particularly following the launch of its Triarii cyber protection platform. The Cyber Division’s channel partners are accelerating their requirements and the spin out of N-Able Inc from SolarWinds Inc., which completed in July 2021, only further increase this potential with improved access into their 25,000 MSPs and 500,000 end users.

The net proceeds of the Disposal, combined with the recently announced Growth Loan facility with BOOST&Co, will give Falanx greater financial resources to make earnings enhancing acquisitions as well as organic investment in sales and marketing, delivery capability and continued service enhancement and innovation.

Falanx Assynt Limited

Assynt provides market-leading geopolitical reporting and analysis focused on key major emerging markets and overarching global themes. Assynt has been recognised by Chambers & Partners, listed in their 2021 rankings as one of only five firms in their top tier of global geopolitical risk providers. Assynt’s client base includes some of the largest and most recognised global corporate names.

The Assynt Report focuses on the strategic intelligence needs of global corporates (many of which are headquartered outside of the UK), where it has produced over 1,200 reports analysing key geopolitical events in over 40 countries, including specialist analysis of international jihadist trends and more recently the impact on COVID across the world. In some cases, Assynt’s customers request Assynt’s embedded analysts to integrate Assynt’s geopolitical understanding and business-focused analytical expertise into the host client’s operational capabilities.

Assynt has made good progress in developing its recurring revenue model for the provision of strategic intelligence by the provision of embedded analysts and report subscriptions. In the year ended 31 March 2021 it recorded revenues of c£2.1 million and an adjusted EBITDA of £0.1 million.  Assynt made a loss before tax for the year ended 31 March 2021 of £0.06 million.

Overall Group revenues (including Assynt) were £5.24 million for the year ended 31 March 2021, with an Adjusted EBITDA loss of £1.26 million and loss before tax of £3.56 million, of which £2.15 million related to non-cash charges including £1.44 million for the impairment of the investment in Furnace which was spun out in December 2019. Further details on both Assynt and the Group are contained in the Company’s announcement of its audited results for the 12 months ended 31 March 2021 released on 29 September 2021.

Transaction details

Falanx Assynt Ltd (including its four overseas wholly owned subsidiaries in the UAE, USA, Hong Kong and Ireland) has been acquired by CAS, a wholly owned subsidiary of Cross Atlantic Solutions Partners LLC, which is backed by funds advised by a US based investment firm focused on investing in information, marketing and tech-enabled services businesses.

The consideration for the Disposal is as follows:

·    overall consideration of £4.6 million in cash on completion (“Consideration”) before the deduction of a working capital, adjustment based on completion accounts of Assynt of approximately £0.5 million; and

·    £0.35 million of the Consideration will be held in separate escrow against any potential warranty issues for twelve months from completion. 

As is customary, the Company will make certain warranties and give certain indemnities to CAS in respective of Assynt’s historic business and the Company will ensure that a normalised level of working capital remains within Assynt at completion. All of Assynt’s employees are transferring as part of the Disposal. Following the Disposal, the Company and CAS have agreed that the Company will provide certain administration services to Assynt until the end of January 2022 as part of an orderly hand over, such services which are governed under a transitional services agreement, and which are provided on an arms-length basis.

Mike Read (CEO) Commented: “I am delighted to announce this transaction.  Falanx is now a pure play Cyber Security business.  Our decision to invest in both our cyber products and services has made Falanx a very good fit with this high growth market. The recent announcements on Triarii and f:CEL have generated interest across our customer base and our major partners. Organisationally, Falanx now has a much simpler structure and the net proceeds of the Disposal give us a strong balance sheet with which to invest further in our products and services, as well as consider earnings enhancing acquisitions to broaden our portfolio.”

“We are delighted that Assynt, which has had strong contract wins in recent months, will be in an environment where it can grow further, and I wish Charles Hollis and his team well. They have been great members of the Falanx organisation and will remain our friends.”

“Our resultant simplified corporate structure, combined with our well-positioned products, growth opportunities and improving financial performance gives the directors increasing confidence about the Company’s future.”

Click to view all articles for the EPIC:
Or click to view the full company profile:
Share on facebook
Share on twitter
Share on linkedin
Falanx Group Ltd

More articles like this

Falanx Group Ltd

Finalists at the Cyber Security Awards 2022

Falanx Group are delighted to have 2 finalists at the Cyber Security Awards, 2022 being held at One Moorgate Place, London! Nicola Hartland, Chief Revenue Officer, is finalist in the category Woman of the Year. Rob Shapland, ethical hacker

Falanx Group Ltd

Charities Cyber Essentials fortnight 7-18th November

Cyber criminals are attracted to money. And that makes charities – and the information they hold – a target. Data on beneficiaries, supporters and volunteers as well as information on invoice and payment details can be sold by

Falanx Group Ltd

Most Inspiring Women in Cyber awards 2022

The nominations for the Most Inspiring Women in Cyber awards are out! It’s always wonderful to read about the incredible women in our industry, who are making fantastic contributions and paving the way for others. In no particular

Falanx Group Ltd

Almost half of Irish SMEs hit by multiple cyber attacks

Almost half of Irish small and medium businesses have experienced multiple cyber attacks in the last three years, according to a new study. The study from Microsoft and Vodafone states that the average financial loss per business was

Falanx Group Ltd

Falanx Group strengthens Board with new appointments

Falanx Group Ltd (LON:FLX), the AIM listed provider of cyber security services, has announced the appointment of William Kilmer as an independent Non-Executive Director and Richard “Rick” Flood as an Executive Director and with immediate effect. William Kilmer

Falanx Group Ltd

Rob Shapland speaking at International Cyber Security Expo 2022

Catch Rob Shapland our very own head of innovation and ethical hacker at this years International Cyber Security Expo. Where: Kensington Olympia, London.When: 28th September, 2022Session Time: 11.30am Rob will be presenting: How to Steal a Vaccine  The importance of vaccines in

Falanx Group Ltd

Falanx Group expecting further growth in orders in H2 FY23

Falanx Group Ltd (LON:FLX), the AIM listed provider of cyber security services, has announced its audited results for the year-ended 31 March 2022.    Financial highlights • Revenues £3.54m (2021: £3.12m), an increase of 14% • Closing Monthly Recurring Revenues (“MRR”) 25% greater

Falanx Group Ltd

Why cyber security operation centres should be UK based

The current financial environment has everyone money conscious, but many companies are still leaving themselves vulnerable to big pay-outs to cyber fraudsters. Cyber criminals earn three times the average salary of a FTSE 100 chief executive, according to

Falanx Group Ltd

You have to live and breathe entrepreneurship

Serial founder Nicola Hartland has scaled and sold several businesses from Aberdeen to Basingstoke. She reveals the secrets to her success. Falanx Cyber When Falanx Cyber – part of publicly listed Reading-headquartered Falanx Group – sought someone earlier

Falanx Group Ltd

Transport operator Go-Ahead flags cyber security breach

British transport operator Go-Ahead (GOG.L) said that it had detected “unauthorised activity” on its network earlier in the week, adding that the cyber security incident had no impact on its UK or international rail services. The incident has been notified

Falanx Group Ltd

The fallout from the NHS cyber attack

On August 4th, British software services provider, Advanced experienced a disruption to their systems that they have determined to be the result of a ransomware attack. It just so happens Advanced provides 85% of 111 services for the National Health

Falanx Group Ltd

Rob Shapland speaking at International Cyber Security Expo 2022

Where: Kensington Olympia, London.When: 28th September, 2022Session Time: 11.30am Rob will be presenting: How to Steal a Vaccine  The importance of vaccines in the age of Covid-19 cannot be underestimated. This session will describe how the speaker planned and executed a cyber

No more posts to show