3 Sixty Risk Solutions (SAFE.C) buys INKAS Security Services and takes aim at bigger fish

Thomas Gerstenecker, the CEO of 3 Sixty Risk Solutions (SAFE.C), is a man with a plan.

We like companies that say they’re going to do something and then go ahead and do it.

Last month, we wrote about his company’s growth plans for the next year, which included accretive and organic acquisitions before expanding coast to coast and entering the U.S. security market.

3 Sixty Risk’s latest acquisition, Canadian-based security firm INKAS Security Services, is a big step towards fulfilling those ambitions.

The resulting company will work as a powerful springboard to propel 3 Sixty’s international vision as they leap off into the U.S. markets and beyond.

“In very short order, and through our vision to directly focus on the cannabis sector, we have experienced rapid growth from a small regional provider to a nationwide presence with a significant vehicle fleet and secure facilities. With this acquisition we become one of the largest cannabis sector secure transportation outfits, and one of the largest cash management operators in Canada,“ said Gerstenecker.

3 Sixty identified INKAS early on as a group with the right philosophical outlook and resources that could be leveraged to best meet their company goals—and it’s assets aren’t bad either.

INKAS Security has over 200 employees including 150 skilled secure transport drivers.

They also have more than 50 armoured vehicles, and facilities in Ontario, Alberta and Quebec.

The transaction will bring cost synergies, combining auto and cargo insurance. 3 Sixty will also receive discounts on armouring future vehicles through INKAS’ former parent company.

INKAS Security and 3 Sixty both contract to cannabis companies and government organizations, but INKAS also services financial institutions, adding an important and previously unrealized segment to 3 Sixty’s customer base.

Acquisition highlights:

  • Increased cannabis secure storage capability, allowing for greater diversification of revenue streams.
  • Immediate increase in operational capacity, revenues and market share.
  • 16 new cannabis clients.
  • An additional 150 secure transport employees, further allowing for scalability of 3 Sixty’s operations.
  • A diversified revenue mix of non-cannabis customers, some of which are leading financial institutions in Canada.

3 Sixty is also getting INKAS’ software division, AppGear, which comes with a proprietary visitor management system software called iLobby.

ILobby is a tablet based visitor registration and management system that automates security infrastructure by tracking every visitor and employee and ensuring that only authorized visitors have access to the facility.

The company uses this system internally but has also marketed to Fortune 500 companies and airports.

The terms of the agreement have 3 Sixty purchasing all of ISSL’s assets for $13.75 million, including a $1.75 million earn-out payment in common company shares when revenue benchmarks of $15 million and $20 million are met in the first and second years respectively.

3 Sixty Risk Solutions is a company with big plans, but they have the time, money and will to see them through and that makes them a company worth watching.

Trading was halted until 7:30 a.m. and shares edged down $0.02 to $0.435 by the end of trading.

3 Sixty Risk Solutions has 143,913,059 issued and outstanding shares with a market cap of $62.6 million.

—Joseph Morton

Full disclosure: 3 Sixty Risk Solutions is an Equity.Guru marketing client.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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