Digital Barriers has made another bolt-on acquisition in the physical side of the security market. The ‘buy-and-build’ homeland security market specialist run by ex-Detica CEO Tom Black is acquiring tiny Cambridge-based Zimiti on a cash-free, debt-free basis for an initial consideration of £1.5m in cash. A further deferred consideration may be paid up to a total of £10m, including £4.25m in cash with the rest in shares. Digital Barriers is happy to pay this for a company that made a loss of £301k on a turnover of just £144k last year (to end Feb 2011) and had net assets of minus £1.1m. That’s because Black shares Zimiti’s belief that its IP, for Unattended Ground Sensors, is compelling with strong potential in the defence and security sectors and a good fit with Digital Barriers’ strategy.
According to our calculations, this is Digital Barriers’ sixth acquisition since it arrived on the market at the beginning of 2010. But yet again it’s on the physical side of security rather than the cyber side, which gets most of the attention in the market. With valuations of cyber security companies remaining strong because of the hype, Digital Barriers may well choose to build that side of the business organically.