3 Sixty Risk acquires INKASA for $13.75-million
2019-04-02 09:49 ET - News Release
Mr. Thomas Gerstenecker reports
3 SIXTY SECURE ACQUIRES INKASA SECURITY SERVICES LTD. CREATING ONE OF CANADA'S LARGEST SECURE CANNABIS TRANSPORT COMPANIES
3 Sixty Risk Solutions Ltd. has acquired substantially all of the assets and business of INKASA Security Services Ltd. valued at approximately $13.75-million, payable in cash, shares, vendor take-back note and earn-out as described herein in the transaction summary, and pursuant to the terms of an asset purchase agreement.
Today's 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 ofA the leading SecurityA 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 3 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 Secure 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;
- 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," notes 3 Sixty'sA 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 (the "Purchase Price"), 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.
About 3 Sixty Risk Solutions Ltd. (CSE: SAFE) (OTCQB: SAYFF) (FSE: 62P2)
3 Sixty Risk Solutions Ltd., operating through its wholly-owned subsidiary, 3 Sixty Secure Corp., is Canada's leading security service provider to the cannabis sector, transporting over $250 million of product every month. 3 Sixty now provides enhanced cash management, cannabis security consulting, guarding and secure transport security services to more than 600 customers and more than 76 licensed cannabis producers, including some of the world's largest, such as licensed producers owned by Canopy Growth Corporation. As of today, 3 Sixty now has a staff of over 600 employees with a fleet of over 150 vehiclesand becomes one of the largest cash management service providers in Canada.
About INKASA Security Services Ltd.
INKASA Security Services Ltd. is an integrated security risk management company offering a full cycle of security services to cannabis operations, government organizations as well as retail businesses, merchants and financial institutions. INKASAtrademark Security Services Ltd. services include the secured transportation of cash and its equivalents, coin processing, ATM services, armed security and vault storage. Within the realm of cash management services in Canada, INKASAtrademark Security Services Ltd. is seen as a leader with proven results, an established track record and a highly-skilled workforce. INKASAtrademark Security Services Ltd. has steadily increased its revenue over the previous three years and has a workforce of over 200 employees including over 150 skilled secure transport drivers with over 50 armoured vehicles with facilities in Ontario, Alberta and Quebec.
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