Montréal-based Quantum eMotion (QeM) is looking beyond quantum security by acquiring Victoria-based Plurilock.
The news: The two publicly traded Canadian cybersecurity firms announced an acquisition deal on Monday evening. The deal would see QeM acquire all of Plurilock’s outstanding shares for nearly $34 million CAD, split across 30 percent cash and 70 percent common QeM shares.
QeM said the deal is meant to accelerate its transition from developing quantum-secure technologies to a broader commercial cybersecurity business. Plurilock brings that in the form of an established cybersecurity platform and revenue base, including enterprise and government customer relationships, as well as public-sector procurement channels.
The combined company will be led by QeM president and CEO Francis Bellido, while adding Plurilock CEO Ian Paterson and CFO Veera Singh as executive vice-president and senior vice-president, respectively. Plurilock shareholders will have a chance to approve the deal in November, shortly after which QeM and Plurilock expect the transaction to close.
From the source: Bellido said in a statement that the proposed deal is about accelerating Quantum eMotion’s next stage of development.
“By combining AI-driven, continuous risk intelligence and identity with quantum-secure cryptographic enforcement, we believe QeM can build a differentiated cybersecurity platform at the intersection of AI and quantum security,” Bellido said.
The context: Plurilock started in 2016 by developing behavioural biometrics, a cyber authentication method that identifies users by their typing rhythms or mouse movements. The company more recently offered cybersecurity technology and advisory services to enterprise and government clients.
Earlier this year, Plurilock downsized its C-suite and executive compensation in a move it hoped would help it reach profitability. This included the CTO and COO roles being “phased out” and a 30-percent reduction in executive compensation. A few months later, Toronto-based drone maker ZenaTech purchased a 10-percent stake in Plurilock. In its second-quarter earnings last month, Plurilock reported just over $21 million in revenue for the six months ending June 30; about $14 million less than the same period last year. The company attributed the revenue drop to a “strategic decision to reduce lower-margin resale activities.”
Final thought: Tech leaders have been sounding the alarm that quantum computers will eventually be powerful enough to crack current encryption methods. For QeM, which said it’s pushing its technology portfolio through US cybersecurity standards and validation processes, acquiring Plurilock moves its cybersecurity focus from the ‘eventually’ to the present.
Feature image courtesy Plurilock.