Excite Expands Cybersecurity with Acquisition of CBIT Digital Forensic

Excite Technology Services Limited has announced the signing of a binding term sheet to acquire 100% of the share capital of CBIT Pty Limited and its affiliates, collectively known as CBIT Digital Forensic Services (CDFS). The acquisition remains subject to successful due diligence and ASX and Excite shareholder approvals.

This acquisition aims to strengthen Excite’s position in the Incident Response and Digital Forensics sectors. It aims to expand the company’s capabilities and expand its presence in managed cybersecurity, deep digital data forensics, accredited training and IT services.

According to the data provided, CDFS reported unaudited revenue of AUD 14 million for the financial year ending June 30, 2024, with normalized EBITDA of approximately AUD 954,000 after related party costs and one-off payments. The transaction is expected to have an immediate impact on Excite’s financial results.

The transaction details show an initial settlement payment of A$750,000 in cash and the issue of 100,000,000 fully paid ordinary shares in Excite. An additional deferred payment of A$750,000 will be made by 1 July 2025, subject to the suppliers not resigning their positions in the group.

In addition, performance-based remuneration up to A$2.4 million is also part of the deal. This remuneration is contingent upon CDFS achieving audited EBITDA of AUD 1.8 million for the 12 months ending June 30, 2025. If EBITDA is lower, but not less than AUD 1 million, a pro-rata payment will be made. In addition, performance compensation up to AUD 800,000 is payable if EBITDA exceeds AUD 1.8 million on a dollar-for-dollar basis and is payable in 50% shares and 50% cash. The underlying price of these shares will be the higher of AUD 0.015 per share or 5-day volume weighted average price (VWAP) as of June 30, 2025.

Excite will also sign a ten-year commercial lease for a state-of-the-art forensic laboratory and training facility with an affiliate of CDFS suppliers. The facility, which is being co-owned by the Australian Government, forms part of the CDFS’s growth strategy and will facilitate collaboration with Australian intelligence and law enforcement agencies. The lease is valued at AUD$578,000 per annum and construction is expected to be completed by July 2025.

As part of the transaction, Excite will formalize employment agreements with the CDFS providers, including market-based compensation, short-term incentives and performance rights. The due diligence process will begin immediately and is expected to last four weeks, after which resolutions will be proposed at Excite’s annual general meeting. The transaction is expected to close shortly after that meeting, likely in early August 2024.

Zoran Iliev, CEO of CDFS, expressed optimism about the acquisition. “We look forward to joining forces with Excite. This acquisition will significantly enhance our capabilities, enabling us to implement the results of our research and development efforts and provide artificial intelligence-based advanced cybersecurity defense and incident response strategies. This acquisition will unlock the value of providing our customers and partners with a more comprehensive and robust support framework. By applying a rigorous approach to digital forensics, we will continue to ensure the security and resilience of their digital assets and infrastructure to emerging threats,” he said.

Echoing this sentiment, Excite CEO Bryan Saba commented, “We are excited to welcome CDFS to the Excite Group. This acquisition will enhance our service offerings and position the Company as a leader in incident response, with capabilities that were unique to Excite. I look forward to working with Zoran and CDFS to better serve our customers and drive growth. We look forward to working with the talented CBIT team to achieve our shared goals.”

Once completed, the acquisition is expected to be accretive to revenues and deepen Excite’s relationships with key Australian government and law enforcement agencies, securing its position in the digital forensics and cybersecurity sectors.