Israeli cybersecurity company HUB Security is to list on the Tel Aviv Stock Exchange (TASE) through the 'back door' by merging with an existing company Advanced Logistics Development (ALD).
The merger will be at a company valuation of $105 million pre-money and $145 million after the capital is raised and after the merger is completed. The capital raising will include $40 million from institutional investors while $10 million in shares will be purchased from Zigmund Bluvband, the current controlling shareholder in ALD. After the merger Bluvband will serve as chairman of the merged company, and HUB's investors will hold a 51% stake in ALD.
ALD and HUB say that they have a letter of intent from institutions to invest $65 million. The merger is subject to various approvals and is expected to be completed by the end of May. The merger and the capital raising is being led by A-Labs Advisory & Finance Ltd. led by managing partner Doron Cohen together with Clover Wolf Capital Fund.
ALD is engaged in software and consultancy while HUB, which was founded in 2017 by CEO Eyal Moshe and CTO Andrey Laremenko has developed cybersecurity solutions, among other things using AI. According to IVC, HUB has raised $5 million from AXA Ventures and OurCrowd. HUB says it has an advanced encrypted computer solution for enterprises, which aims to prevent hostile infiltration and protects sensitive commercial data.
Following the notification to the TASE about the merger, ALD's share price rose 20% and is up 148% since the start of the year, giving a market cap of NIS 84 million.
In the first half of 2020, ALD had revenue of NIS 54 million, down 10% from the first half of 2019, and a net loss of NIS 500,000. ALD recently reported an agreement to sell software to a Brazilian company and the extension of a contract with a government company, which will generate revenue of NIS 4 million in 2021.
Moshe said, "This is one of those rare cases where a company merger happens naturally with complete synergy. The merger with ALD will provide HUB with a global marketing infrastructure that would have taken us years to establish independently, connecting us with dozens of potential high-profile customers from the world's leading brands, including governmental institutions, insurance conglomerates, commercial banks and others."
Published by Globes, Israel business news - en.globes.co.il - on February 15, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021