by Chiara Rossi All the details on the agreement signed by Cy4Gate, Electronics group, for the purchase of the Aurora holding Electronics ready to acquire - through Cy4gate - Aurora Spa, holding that controls RCS Lab, the main supplier in Italy of tools for environmental, telephone and telematic interception to prosecutors, law enforcement agencies and services. On 17 December Cy4Gate, a company active in the cyber intelligence and security market listed on Euronext Growth Milan since June 2020, announced a preliminary agreement for the acquisition of 100% of Aurora, the company said. Aurora Spa is “at the top of a market leader group in Italy and one of the main European players in the Forensic Intelligence & Data Analysis segment” , continues the note. Cy4gate's aims for the wiretapping business have long been known. On May 4th, the company of the Electronics group led by the Benigni family announced that it had started negotiations to acquire RCS Lab. The Milanese company RCS Etm Sicurezza Spa (owner of the RCS Lab brand) has been carrying out, since its establishment in 1993, activities production and rental of electronic equipment to support the investigative activities ordered by the Italian judicial authority. The capital of RCS Lab is held by the holding company Aurora. Precisely on May 4, the activities of the company that - on the mandate of the Perugia prosecutor's office - carried out the interception activity with the Trojan against the former councilor of the CSM, Luca Palamara, were suspended by the public prosecutor of Naples, Giovanni Melillo, as the newspaper La Verità had revealed. Instead of RCS, Cy4gate aims directly at the control of the holding company Aurora spa. The operation will be financed with a capital increase at the price of the new shares between 10.5 and 11 euros per share. But the market did not take the announcement well. On December 17, free fall for the Cy4gate title. “In fact, there is no option right”, underlines MF.
All the details. WHAT THE AGREEMENT SIGNED BY CY4GATE PROVIDES FOR "The binding contract provides for the purchase by Cy4Gate of the entire share capital of Aurora on the basis of an Enterprise Value at closing of 90 million euros, with an earn-out of up to 15 million euros due in 2023 subject to the achievement of certain performances of the Aurora group in 2021 and 2022 ”explains Teleborsa. WHAT AURORA SPA DOES Aurora S.p.A., based in Milan, is at the top of a group of 8 companies active - in Italy and in Europe - in the development, production and marketing of software and devices for Forensic Intelligence & Data Analysis, which allow advanced analysis of information for investigative and decision support purposes (Decision intelligence) for institutional clients. Within the RCS ETM Sicurezza S.p.A. group, 100% controlled and operational since 1993, it holds the market leadership in Italy and has a strong international vocation and DARS Telecom S.L., 65% controlled, is active in the Spanish market and part of the Aurora group since 2006. THE PROPERTY With a share capital of 5,334,060 euros, the company is controlled by the shareholders Alberto Chiappino (81.3%), Michele Tomba (10.6%) and Fabio Cameirana (8.1%). THE TOP In addition to the president Alberto Chiappino, Fabio Cameirana (CEO) and Michele Tomba make up the board of directors. THE NUMBERS The consolidated revenues of the Aurora group as at 31 December 2020 were equal to Euro 40.3 million with an Ebitda of approximately Euro 10 million (margin of approximately 25%), the note reads. For 2021, the company expects to continue "in the strong growth trend both in Italy and abroad". The Milanese holding recorded a turnover of 558 euros in 2020, compared to zero revenues in 2019. Income from equity investments amounted to 1,017,250 euros. However, profit grew to 750,770 euros (compared to 706,534 euros in 2019). The costs of production amounted to 223,029 euros. The company has a total debt of 3,199,874 euros. THE CY4GATE STRATEGY "The acquisition will strengthen the overall value proposition of the company both towards institutional and corporate clients, confirming the nature of a 360-degree cyber software house," Cy4gate emphasizes in the note. THE CAPITAL INCREASE PLANNED FOR CY4GATE The acquisition will be financed through a capital increase with the exclusion of the option right, for a total amount up to a maximum of 90 million euros, which will be underwritten by the parent company Elettronica S.p.A. for 10 million, by TEC Cyber S.p.A., a company set up by the shareholders of "The Equity Club" - club deal promoted by Mediobanca and Roberto Ferraresi - who will act as anchor investor - for an amount from 20 million up to a maximum of 40 million and by investors qualified institutional investors in Italy as well as institutional investors abroad for the residual amount. Cy4Gate will also use a bank loan of € 22.5 million, including a portion of € 2.5 million intended for the refinancing of the Aurora group exposure, a further € 2.5 million to support working capital as well as a committed CapEx line of € 20 million for future M&A opportunities consistent with its growth strategy. THE NEW GOVERNANCE Following the capital increase, the new shareholding structure is expected to have Elettronica as the relative majority shareholder with a stake of approximately 38.5% of the share capital, while Tec Cyber as the second shareholder holding an interest of between 8% and approximately 16% of the share capital. CLOSING The closing of the transaction is expected within the first quarter of 2022. TRANSLISTING GOAL Furthermore, once the transaction is completed, Cy4Gate intends to initiate the preparatory and functional formalities for the translisting on the Euronext Milan regulated market organized and managed by Borsa Italiana. The Cy4Gate board of directors will determine the price of the newly issued shares. This is the result of the book-building activity with institutional investors within the range between 10.5 and 11 euros per share. THE SATISFACTION OF UNDER SECRETARY MULÈ Finally, the operation was met with the satisfaction of the Undersecretary of Defense, Giorgio Mulè (FI). "An operation that marks on the one hand the corporate dynamism of an Italian company engaged in a strategic sector, that of cyber security, on the other an important step towards the establishment of a pole of national skills and technologies in the field of cyber intelligence and cyber security ". Undersecretary Mulè is closely following Cy4gate's activities: he had visited the company led by Emanuele Galtieri last June. INTER ARTICLE