Falanx Group Ltd (AIM:FLX), the global cyber security and intelligence provider, in line with its strategy of increasing value in the high growth Cyber Security market, is pleased to announce the acquisition of Secure Storm Limited. 

SecureStorm Ltd - Cyber Security Consultancy

Securestorm® is a privately held company and was incorporated in 2017 following a restructuring of predecessor business owned by the vendors. It provides professional services and consultancy regarding cyber and cloud security, and the associated regulatory requirements such as GDPR. Corporate customers include Fortune 100 companies and holds large managed service contracts with several UK government organisations


Securestorm® is a National Cyber Security Centre (NCSC) certified cyber security consultancy, holding a number of attractive attributes which will contribute significantly to the speed of growth in Falanx professional Cyber services. This is particularly relevant in supporting the adoption of our MidGARD service in UK Government departments and the rapidly expanding Cloud and Tech markets. These include; 

  • Crown Commercial Supplier status, on multiple government procurement frameworks, including: G-Cloud 10, Digital Outcomes and Services (DOS3) and Cyber Security Services 2
  • Longstanding UK Government contracts for managed cyber security services and consultancy
  • Extensive partnerships and contracts with both start-ups and international cloud and tech companies
  • An extensive portfolio of proprietary compliance and security process intellectual property
  • Exclusive partnership and licence of Edgescan's full-stack vulnerability assessment services for use in UK Government
  • Partner of CybSafe, the GCHQ accredited cyber security awareness and GDPR training solution
  • Member of the Amazon Web Services Partner Network and trusted vendor on the AWS Marketplace
  • Valued accreditations such as, NCSC Certified Professional, Certified Cloud Security Professional, Certified Information Privacy Professional and Certified Information Systems Security Professional
  • Greater delivery capacity into our growing Data Privacy and GDPR consultancy practice

Revenue and Consideration

The consideration of £100,000 is satisfied by the issue of 2,222,222 Falanx new ordinary shares. The vendors will be subject to certain lock in arrangements.  

For the year ended 30 June 2017, Securestorm had revenues of approximately £700,000, operating profits of £30,000 and net assets were approximately £20,000 at 30 June 2017. In the latter part of 2017 an investment in delivery capability was made ahead of a planned increase of revenues. Unaudited management accounts for the 11 months to 31 May 2018 show revenues of £500,000 and an operating loss of £150,000. Net liabilities were approximately £130,000 at 31 May 2018. These are mainly due to HMRC where a deferred payment scheme has been agreed and is in place.

The majority of losses were incurred before December 2017. These have since been eliminated by customer contract wins and cost reductions. In recent months Securestorm has been at break even with a strengthening pipeline of business. 

Integration and Synergies

Securestorm® will be immediately integrated into Falanx's Cyber division, its professional staff including its founder Tony Richards will be transferred over and will utilise existing Falanx infrastructure. This is expected to drive synergies around cost sharing, revenue enhancement and utilisation improvement.  

Grant of Options

Falanx has a share option scheme to align the interests of staff with those of shareholders.  Under this the Company is today making a grant of 4.25m options as follows

  • 2.0m options at a strike price of 5 pence each (0.76% issued share capital) to Tony Richards, the founder of Securestorm,
  • 2.25m options at a strike price of 5 pence each to certain staff including those in First Base as referenced in our announcement of 16 March 2018

All of the above options vest in three tranches: the first tranche when the share price reaches 7.5p (25%), the second tranche when the share price reaches 10p (25%) and the third tranche when the share price reaches 12.5p (50%). The Options only vest if the average share price has reached the relevant threshold level for a period of three months, save for the event of a change of control in the Company, in which case they will vest in full.  

Mike Read, Chairman and Chief Executive Officer of Falanx, commented: "The acquisition of SecureStorm provides Falanx with a number of exciting opportunities, to both support our growing UK Govt business and expand our footprint in these marquee organisations.  The unique relationship with Amazon Web Services and the introduction of our MidGARD service to a global market place is also very promising. We also welcome Tony Richards to the team, a highly respected and recognised cyber security thought leader who will head our consultancy arm and take up the position of Falanx Group Chief Information Security Officer" 

Tony Richards, Founder of SecureStorm Ltd, commented: "The combination of Securestorm with Falanx is a perfect match, enabling the integration of Falanx's MidGARD and security testing services with Securestorm's managed security and consultancy services to deliver a stronger portfolio to our customers. I look forward to working with Mike Read and the rest of the team, to expand Falanx's market share and increase overall growth, utilizing our partnership with AWS, relationships across the public  and tech sectors, and placement on various government procurement frameworks. "

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