Infotrust has finalized its acquisition of Canberra-based Catalyst Cyber, enhancing its foothold in federal government cyber security with a deal structured around performance-linked payments.
- Acquisition settled with $1.6 million cash and 1.87 million shares
- Valuation based on 5x forecast FY26 EBITDA of $0.7 million
- Earn-out provisions tied to FY27 and FY28 EBITDA performance
- Strengthens Infotrust’s presence in regulated government environments
- Half of shares subject to two-year escrow to ensure continuity
Strategic Expansion into Federal Cyber Security
Infotrust Ltd (ASX:ITS) has completed the acquisition of Catalyst Cyber Pty Ltd, a Canberra-based consultancy specialising in cyber security services for Federal Government clients. The deal marks a significant step in Infotrust’s cyber-first growth strategy, expanding its sovereign cyber security capabilities in high-assurance and regulated environments.
The acquisition was settled with $1.6 million in cash alongside the issuance of 1,871,156 fully paid ordinary Infotrust shares. Notably, 50% of these shares are locked in voluntary escrow for two years, underscoring a commitment to retain key Catalyst Cyber personnel and ensure operational continuity.
Earnings-Linked Valuation and Future Incentives
The valuation of Catalyst Cyber was pegged at a multiple of 5 times forecast FY26 EBITDA, estimated at approximately $0.7 million, implying a base enterprise value near $3.5 million. The transaction includes a true-up mechanism, adjusting final consideration based on audited FY26 results, reflecting a cautious approach to aligning price with actual earnings.
Further, Infotrust has structured earn-out provisions for FY27 and FY28, where additional payments may be triggered if Catalyst Cyber exceeds its FY26 EBITDA baseline. These incremental earnings will be valued at a higher multiple of 6 times, incentivising ongoing performance and value creation post-acquisition.
This deal follows Infotrust’s recent strategic moves, including the divestment of its Nexgen segment, which sharpened its focus on cyber security services. The acquisition complements this pivot by deepening its federal government relationships and specialist capabilities, as outlined in the earlier deal announcement and federal cyber security reach.
Implications for Infotrust’s Market Position
By integrating Catalyst Cyber, Infotrust bolsters its footprint in Canberra and enhances its ability to serve government and defence-aligned customers requiring security-cleared personnel and high-assurance advisory services. This acquisition aligns with Infotrust’s ambition to be a leading sovereign cyber security provider in Australia.
The transaction’s structure, combining cash, equity, and performance-based earn-outs, reflects a balanced approach to risk and reward, while the escrow arrangement signals confidence in Catalyst Cyber’s management team and operational stability. Investors will be watching how this acquisition translates into earnings accretion and strategic advantage as audited results and integration progress unfold.
Bottom Line?
Infotrust’s acquisition of Catalyst Cyber positions it strongly in federal cyber security, but final value hinges on audited earnings and future performance.
Questions in the middle?
- How will Catalyst Cyber’s FY26 audited results impact final acquisition costs?
- What operational synergies will Infotrust realise integrating Catalyst Cyber’s government contracts?
- Could further acquisitions accelerate Infotrust’s sovereign cyber capabilities beyond this deal?