Falanx Group Ltd (LON:FLX), the global intelligence, security and cyber defence provider, has today announced the acquisition of AuditSec Services Ltd (“AuditSec”), a cybersecurity company founded by Richard Morrell, one of the UK’s foremost cybersecurity entrepreneurs.
DirectorsTalk caught up with Richard Morrell to discuss his new position with the group. Richard explains the driving factors for joining Falanx given his extensive security background and current CTO role at Gartner, talks us through the opportunity and why there really is very little in the way of competition and where he sees the growth for the service as things ramp up.
AuditSec provides consultancy services and thought leadership to brands across Europe, aligned with and contracting to The Cloud Security Alliance. The company has provided security guidance to some of the world’s largest petrochemical, pharmaceutical and industrial companies.
As part of the transaction Mr Morrell joins Falanx Group from Gartner, the global information technology research and advisory firm, where he served as their Chief Technology Officer and Technical Director for the Security and Risk Practice to world leading brands. Richard will act as Group Chief Technology Officer (CTO) and Managing Director of Falanx Cyber Technologies, teaming up with Jay Abbott, Exec-Director Cyber Defence, to drive further innovation and market penetration of MidGARD.
Richard co-founded SmoothWall in August 2000 and co-developed the firewall technology of the same name, which fast became a global standard. SmoothWall continues to trade successfully and profitably, protecting millions of networks worldwide. After successfully exiting SmoothWall, Richard headed up Internet Security for VirginMedia, who he still works with after fifteen years, having recently protected them against a major vulnerability affecting their European platform as recently as July 2017.
Richard is an in-demand public speaker, appearing on stage throughout 2017 as a Cyber expert, at the invitation of the US Department of Homeland Security, Foreign and Commonwealth Office, American Petrochemical Institute, Trend Micro and governments across Central and Southern Europe. Most recently AuditSec provided guidance and input to a major cyber breach affecting one of the UKs foremost telcos. AuditSec has also recorded and produced a series of radio shows, with Richard talking to thought leaders in cybersecurity across the world and a listening audience of over 80,000 downloaders.
Richard is a UK CLAS GCHQ accredited consultant and has worked with UK and US Government agencies at the highest levels including the US Inland Revenue Service and the US Department of Defense on Five Eyes and Four Eyes projects at battlespace and deployed level.
AuditSec made a £8,641.68 profit in the 7 month period 23 January to 29 August 2017 and is forecast to generate £250,000 of revenue over the full reporting year. Reported net assets of £8,431.33 as at 29 August 2017.
The acquisition will be financed by issue of 750,000 Falanx shares. Application will be made for the admission of 750,000 new Ordinary Shares to be issued pursuant to the Acquisition to trading on the AIM Market of the London Stock Exchange, which is expected to take place on or around 8.00 a.m. on 18 September 2017 (“Admission”). Completion of the Acquisition and is conditional on Admission becoming effective. The new Ordinary Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing Ordinary Shares, including the right to receive any dividend or other distribution declared, made or paid after Admission.
Following Admission, the Company’s enlarged issued share capital will comprise 157,290,075 Ordinary Shares carrying one vote per share. The Company does not hold any Ordinary Shares in treasury.
Stuart Bladen, CEO of Falanx Group Ltd, commented: “We are delighted to welcome Richard Morrell and AuditSec to Falanx Group. Richard is a very highly regarded specialist in the Cyber Security industry, so will prove a highly complementary individual to our team in his role of Chief Technology Officer. The acquisition of AuditSec is a very good strategic fit for our company, especially due to the nature of its business, leading on Cyber Strategy projects with some of the world’s largest companies”
Jay Abbott, Executive Director of Falanx Cyber Defence, commented: “I have known Richard for some time and I am very aware of his outstanding capabilities. He brings a hugely beneficial knowledge of the sector, network and skill set to Falanx and will help the business to continue to grow rapidly. Moreover, the addition of AuditSec will help bring a new range of customers to the Group which will provide further opportunities.”