Acquisitions drive revenue at Emerge Commerce and Plurilock Security

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Both companies report increased revenue for the first quarter of 2022.

Both Emerge Commerce and Plurilock Security posted revenue increases in the first quarter, fending off volatile market conditions due to rising inflation and the ongoing war in Ukraine that has rocked many other businesses. In both cases, the acquisitions helped strengthen the companies’ bottom line.

Despite the good news, shares of both companies have remained in the range of cents, not dollars. Emerge sat 30 cents down from a 52-week high of $1.15; Plurilock’s was worth 23 cents against a 52-week high of 75 cents.

Emerge, which runs a network of e-commerce sites, lived up to its name and came out in Q1 2022 well positioned to grow. The company reported record revenue of $15.8 million, up from $7.1 million in the same period last year. The company also reported positive adjusted EBITDA of $1.1 million, compared to $270,000 for the same quarter in 2021.

Ghassan Halazon, Founder and CEO of Emerge, said, “Q1 2022 marks the company’s first full quarter with BattlBox Group and WholesalePet under Emerge ownership, and demonstrates the power and resilience of our diverse platform. , even if the first quarter is a seasonal quarter for some. of our vertical markets.

Emerge acquired BattlBox and Carnivore Club for $23.9 million in 2021 and bought Wholesalepet.com for around $31.2 million the same year.

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The company described the current M&A potential as strong and said it had a number of letters of intent signed, including some follow-on acquisitions.

Emerge also believed that recent market volatility could result in acquisition opportunities and more attractive pricing.

Emerge noted that it was able to use its existing credit facility to finance its acquisitions. At the end of 2021, the company increased its credit facility to $25 million. The company said in its earnings report that it intends to refinance its current credit facility to provide additional capital for upcoming acquisitions, working capital and pricing improvements.

Emerge also filed a base shelf prospectus in January to raise up to $100 million. In its filing, the company said the offer would provide it “financial flexibility and effective access to Canadian capital markets…to pursue its growth and acquisition initiatives.”

“Our M&A pipeline is currently deeper than at any point in our history, driven by entrepreneurs looking for alternatives to scale profitably,” Halazon said.

Like Emerge, Plurilock Security, a company specializing in behavioral-biometric cybersecurity tools, saw its revenue grow from the companies it had acquired. Plurilock recorded total revenues for the first quarter of $0.6.9 million compared to $75,761 for the same quarter last year.

The company attributed the revenue increase to revenue generated by Aurora Systems Consulting (ASC) and Integra Networks Corporation (INC), two Plurilock acquisitions.

Plurilock acquired ASC, a US-based cybersecurity solutions provider, in 2021 for $1.5 million in cash and shares of Plurilock. He bought INC in March for $1.2 million and Plurilock stock.

The majority of overall revenue came from hardware and systems sales for the three months ended March 31, 2022, totaling $6.4 million. No hardware and systems revenue was recorded in the previous year for the same period.

“Overall, this quarter highlighted our continued commitment to acquiring profitable cybersecurity companies with top-tier customers, who can increase our operating margins and give us access to new distribution channels for sales. of our software products as well as the innovation of new technologies with an emphasis on zero trust principles,” said Ian Paterson, CEO of Plurilock.

Launched in 2016 by the University of Victoria, Plurilock uses behavioral biometrics and AI to provide continuous authentication, rather than login-based authentication for logins. The security company has entered into a definitive asset purchase agreement to acquire certain assets of CloudCodes, an India-based cloud access security broker (CASB) in 2021 for $1 million in cash and $700,000 in ordinary shares of Plurilock.

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