Grenville Strategic Royalty Corp has advanced $500,000 in follow-on funding to Sécurité Above Inc, an information technology security service provider with headquarters in Montréal. The investment is intended to support the company’s purchase of Seccuris Inc, an information assurance integrator platform based in Winnipeg. The acquisition, the value of which was not disclosed, will create the only pure-play managed security services provider with two centres in Canada, Sécurité Above said in a statement. Grenville, a Toronto-based provider of royalty financing, also invested in the company in 2014.
Grenville Completes Follow-On Investment in Above Security
TORONTO, ONTARIO–(Marketwired – Feb. 18, 2015) – Grenville Strategic Royalty Corp. (TSX VENTURE:GRC) (“Grenville”) is pleased to announce that is has advanced an additional CAD$500,000 to Sécurité Above Inc. (“Above Security”) in order for the company to complete its proposed acquisition of Seccuris Inc. (“Seccuris”). In exchange for the amount advanced to Above Security, Grenville will receive a royalty based on Above Security’s gross revenue within Grenville’s average royalty rate of between 1% and 4%.
Above Security is a privately held, Montreal, Quebec-based provider of managed security solutions with over 15 years’ experience providing services to networks of over 250 private and government-owned organization in nearly 40 countries. Above Security’s solutions deliver customized services for monitoring and protecting clients’ critical and sensitive IT assets 24/7. Above Security’s primary service offering is their Managed Security Services, which provides clients the benefits of third-party validation of their security position in real time with the added convenience of no training, configuration or maintenance, and no required capital expenditures or additional headcount.
On February 17, 2015, Above Security publicly announced the proposed acquisition of Seccuris, North America’s premier information assurance integrator. The acquisition of Seccuris creates the only Canadian pure-play Managed Security Service Provider with two Security Operations Centres in Canada. Seccuris was founded in 1999 in Winnipeg, Manitoba and has grown a global customer base from its seven offices in Canada and the United States. Today, Seccuris is the North American leader in premium Enterprise Security Architecture and Information Assurance Integration.
“The acquisition of Seccuris puts Above Security in a position to further its market leading position in the Canadian managed security services industry”, said William (Bill) R. Tharp, President and Chief Executive Officer of Grenville. “We congratulate CEOs Ray Chehata and Michael Legary for joining forces in this rapidly evolving industry. While this transaction will officially be recorded by Grenville as part of an existing investment, we see this as further diversification of our portfolio. We see this deal, denominated in Canadian dollars and fitting our “defensive” investment category as a security provider, as highly desirable from a diversification and foreign exchange balancing perspective. We intend to continue managing risk each month with this investment strategy in the future.”
“We are very excited to see the Seccuris acquisition come to fruition”, said Ray Chehata, President and Chief Executive Officer of Above Security. “Grenville was instrumental throughout the due diligence and acquisition process. It is extremely hard to find a financial partner that can follow you stride by stride during strategic growth and acquisition processes. Grenville has been exactly that partner and we can’t be more satisfied with this collaboration”.
To date, Grenville has completed approximately $25.23 million in royalty financings, building a diversified portfolio in Canada and the United States.
About Above Security
Above Security is a privately held, Montreal, Quebec-based provider of managed security solutions with over 15 years’ experience providing security services to networks of over 250 private and government-owned organization in nearly 40 countries. Above Security’s solutions deliver customized services for monitoring and protecting clients’ critical and sensitive IT assets 24/7. Above Security was founded in 1999 and has representative offices in North America, Europe, and the Middle East.
Seccuris is a Winnipeg, Manitoba-based cybersecurity consulting, risk management, and managed services firm. With offices in Winnipeg, Dallas, TX and key cities across North America, the company is a leader in the premium Enterprise Security Architecture and Information Assurance Integration in the finance, telecommunications, utilities, oil and gas, retail, government, and gaming industries. Seccuris was founded by visionary, Michael Legary, master security architect and winner of an Ernst and Young Entrepreneur of the Year Award.
Grenville is a Toronto-based company that was formed to provide royalty-based finance solutions by acquiring revenue streams generated by growing industrial and technology businesses. Grenville has identified a large and underserviced finance market for companies generating up to $50 million in revenue, many of which are well managed and generating improving cash flow, but face difficult financing hurdles from traditional debt and equity markets. The non-dilutive royalty financing structure offered by Grenville can bridge the financing needs of these companies until traditional debt or equity is available to them on more attractive commercial terms. The application of Grenville’s royalty financing structure into sectors not traditionally serviced by royalty companies represents a new and innovative financing model – Capital Simplified – that has already attracted a considerable number of opportunities with attractive potential returns.
Forward-Looking Information and Statements
This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking information and statements are not representative of historical facts or information or current condition, but instead represent only Grenville’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Grenville’s control. Generally, such forward-looking information or statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken, “will continue”, “will occur” or “will be achieved”. The forward-looking information contained herein may include, but is not limited to, information with respect to: prospective financial performance; expenses and operations; anticipated cash needs and need for additional financing; anticipated funding sources; future growth plans; royalty acquisition targets and proposed or completed royalty transactions; estimated operating costs; estimated market drivers and demand; business prospects and strategy; anticipated trends and challenges in Grenville’s business and the markets in which it operates; and financial position.
By identifying such information and statements in this manner, Grenville is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Grenville to be materially different from those expressed or implied by such information and statements. An investment in securities of Grenville is speculative and subject to a number of risks including, without limitation, risks relating to: the need for additional financing; the relative speculative and illiquid nature of an investment in Grenville; Grenville’s lack of operating history; Grenville’s ability to generate sufficient revenues; Grenville’s ability to manage future growth; the limited diversification in Grenville’s existing investments; dependence on the operations, assets and financial health of investee companies; limited ability to exercise control or direction over investee companies; potential defaults by investee companies and the unsecured nature of Grenville’s investments; Grenville’s ability to enforce on any default by an investee company; competition with other investment entities; tax matters; Grenville’s ability to pay dividends in the future and the timing and amount of those dividends; reliance on key personnel, particularly Grenville’s founders; dilution of shareholders’ interest through future financings; and general economic and political conditions. Although Grenville has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information and statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
In connection with the forward-looking information and forward-looking statements contained in this document, Grenville has made certain assumptions. Assumptions about the performance of the Canadian and U.S. economies over the next 24 months and how that will affect Grenville’s business and its ability to identify and close new opportunities with new investees are material factors that Grenville considered when setting its strategic priorities and objectives, and its outlook for its business. Key assumptions include, but are not limited to: assumptions that the Canadian and U.S. economies will continue to grow moderately over the next 12 to 24 months; that interest rates will not increase dramatically over the next 12 to 24 months; that Grenville’s existing investees will continue to make royalty payments to Grenville as and when required; that the businesses of Grenville’s investees will not experience material negative results; that Grenville will continue to grow its portfolio in a manner similar to what has already been established; that tax rates and tax laws will not change significantly in Canada and the U.S.; that more small to medium private and public companies will continue to require access to alternative sources of capital; and that Grenville will have the ability to raise required equity and/or debt financing on acceptable terms. Grenville has also assumed that access to the capital markets will remain relatively stable, that the capital markets will perform with normal levels of volatility and that the Canadian dollar will not have a high amount of volatility relative to the U.S. dollar. In determining expectations for economic growth, Grenville primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies.
Although Grenville believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements.
For additional information with respect to these risks, uncertainties and assumptions, please refer to the “Risk Factors” section of Grenville’s annual information form dated February 11, 2015 and the other public filings of Grenville available on SEDAR at www.sedar.com. The forward-looking information contained in this press release is made as of the date hereof, and Grenville does not undertake to update any forward-looking information that is contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward looking information and statements attributable to Grenville or persons acting on its behalf is expressly qualified in its entirety by this notice.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Grenville Strategic Royalty Corp.
William (Bill) R. Tharp
President and Chief Executive Officer
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