Acquisition Of Cyber Security Expert

DC Two Limited (ASX: DC2) (“DC Two” or the “Company”), a vertically integrated revenue generating data centre, cloud, and software business, is pleased to announce the execution of a binding agreement to acquire the assets and business of Shimazaki Management Group Pty Ltd trading as Thomas Cyber (“Thomas Cyber”), an established cyber security expert.

This agreement represents an additional step in the vision to expand beyond data centres and infrastructure, building a unique technology offering into the broader cloud microservices sector.

HIGHLIGHTS:

• Strategic acquisition to acquire cyber security expert, Thomas Cyber.
• Cyber security market is expected to reach USD13.95 billion by 2028 in Australia, growing at a CAGR of 18.44%1.
• Acquisition aligned with the Company’s strategy to acquire technology and people.
• Additional milestone in the Company’s strategy to create an end-to-end market offering in the broader cloud microservices sector.
• Thomas Cyber’s management to join the Company’s newly formed cyber division and further develop its cyber security capabilities driven by cutting-edge microservices.
• All performance-based consideration with a $0.025 floor share price, demonstrating the incoming management’s commitment to Company’s organic growth strategy.
• Company continues to assess value accretive transactions to acquire technology and talented individuals, to drive further organic growth.

OVERVIEW:

Thomas Cyber operates an established cyber security business, catering to a diverse client base that includes ASX-listed companies, government organizations, and private entities across Australia and internationally.

This acquisition is crucial for the Company’s clients, delivering enhanced cyber security services, comprehensive end-to-end market solutions, and access to innovative technologies, ensuring the protection and integrity of their digital assets in an evolving landscape.

The proposed acquisition of Thomas Cyber is aligned with the Company’s strategy to acquire technology and attract talented individuals, enhance capabilities, and market position, to drive continued organic growth.

In particular, Thomas Cyber represents an opportunity for the Company to expand its technology capabilities and add expertise in the cyber security technology layer. The rapidly evolving cyber security market is expected to reach USD13.95 billion by 2028 in Australia alone, growing at a CAGR of 18.44%1

Through this transaction, the Company achieves an additional milestone in its strategy to create an end-to- end market offering in the broader cloud microservices sector. Previously announced milestones include:

• Acquisition of Attained: an Australian leading managed IT and cloud services provider, deploying and managing technology solutions across several technology layers including cyber security, managed IT services, cloud services, network and voice solutions. (ASX: 4 April 2023)
• Disposal of non-core assets: the disposal of its non-core infrastructure assets for a total consideration of $3 million, with completion expected by the end of July 2023 subject to remaining conditions precedents being satisfied. (ASX: 8 June 2023)

Immediately following completion of the acquisition, a new cyber division will be created within the Company. Thomas Cyber’s management will join the Company and lead the new division to assist in further developing its cyber security capabilities driven by cutting-edge microservices powered by AI.

The consideration for the acquisition will be performance-based only, with a $0.025 floor share price, demonstrating the incoming management’s commitment to the Company’s organic growth strategy. The key terms of the proposed acquisition of Thomas Cyber are set out in the annexure to this announcement.

Thomas Cyber delivered ~$360,000 in unaudited revenue for FY2023, which provides a strong foundation moving into FY2024.

The Company notes it continues to assess value accretive M&A transactions to acquire technology and talented individuals, expand its capabilities and enhance its market position, driving further organic growth.

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