SSC Security Services Corp has released details of a planned major Canadian acquisition of Logixx Security Inc. saying it is no longer a “small security company”.

SSC President & CEO Doug Emsley revealed the plan which will ‘quadruple’ the size of the SSC empire to a Ca$100m business, as the company announced its second quarter results on 16 May 2022.

SSC is a provider of cyber and physical security services to commercial, industrial and public sector clients across Canada.

”The quarter ending 31 March, 2022 is the last quarter we will report as a small security company,” said Emsley. “During the last few months, we have been working hard to close our transformative acquisition of Logixx Security Inc. (LSI). 

“We expect the shareholders of LSI’s parent company, Avante Logixx Inc., to vote in favor of the sale to us at their Special Meeting on 30 May, and we plan to close the transaction shortly thereafter. 

“After that transaction, SSC will have over $100 million in annual revenue, quadrupling the size the of our business with over 2,100 employees nation-wide, all while remaining debt free and very well capitalized. 

“We look forward to taking advantage of other opportunities to grow our company in the security services business.”

Q2 2022 SSC HIGHLIGHTS

• On February 9, 2022, the Company announced that it had entered into a definitive agreement to acquire Avante Logixx Inc. via Plan of Arrangement. On 30 March 2022, it was announced that the Plan of Arrangement had been mutually terminated by the parties in favor of a new Share Purchase Agreement, whereby SSC will purchase all of the shares of Logixx Security Inc. from Avante Logixx Inc. in an all-cash transaction. The deal is subject to a vote of the Avante shareholders scheduled for 30 May 2022, and if successful, is expected to close shortly thereafter.
  
• During the quarter, SSC recorded revenues of Ca$5.5 million, over 99% of which is from the security segment of our business. We entered into the security business partly through the comparable period the year before, making year-over-year comparisons difficult. Security revenue was down approximately 5.5% from the previous reported quarter, which included the Christmas shopping season, a seasonally busier time for security companies with retail clients.
  
• During the quarter, we continued to convert assets related to our legacy business into cash, which allowed us to eliminate our debt, pay $0.03 per share in dividends, and buy back 73,600 shares of the Company, while still increasing our overall cash position.
  
• Adjusted EBITDA in the quarter was Ca$195,000 (Ca$0.01 per share).
  
• Paid a quarterly dividend of Ca$0.03 per share, or Ca$0.12 per share annualized.
  
• It finished the quarter with (comparison to previous quarter):
  • Cash and cash equivalents of Ca$31.8 million (up 1.9% from Ca$31.2 million);
  • Loans and mortgages receivable of Ca$7.0 million (down 15.8% from Ca$8.3 million);
  • Total shareholders’ equity of Ca$72.4 million (down 1.5% from Ca$73.5 million); and
  • Long-term debt of nil (down from $475K).

About SSC Security Services Corp. 

Founded in 2012 as an agriculture commodity streaming company. On 1 February, 2021, it acquired privately-held SRG Security Resource Group Inc. as the first step in a transition into the security services business.

SRG is a highly-respected cyber security and physical security company with a long operating history in Canada, providing security services primarily to corporate and government clients. Backed by SSC’s capital, SRG acquired the Saskatchewan operations of Impact Security Group in July 2021. As of 1 October 2021, SSC and its subsidiaries have about 625 employees across Canada.

“Our leadership team has decades of experience in the security industry. Combined with our very strong balance sheet, we plan to rapidly grow into a much larger security services firm via incremental organic growth, by acquisition, and via expansion into new service lines within the security sector.”

The financial statement concluded with a short forecast for the future outlook:

“Our legacy business has become an immaterial part of our income statement, although it still occupies a significant part of our balance sheet. We continue to make significant progress converting these assets into cash, and expect this trend to continue. Our objective is to make these resources available for redeployment into our security business.

“All future growth will be in the security segment, in part from organic growth as SRG wins new contracts, launches new products, and via acquisition, as SSC and SRG look to acquire other companies in the Canadian cyber and physical security spaces, such as the recently announced Logixx acquisition.

“We plan to continue to distribute capital to shareholders via the dividend, operate with minimal to no debt while maintaining solid liquidity, and focus on maximizing Adjusted EBITDA on a per share basis.”

Discover more details about SSC at its website HERE

More news about the acquisition from 30 March 2022: Security Services Corp. to Acquire Logixx Security Inc. in All-Cash Deal to Become the Largest Publicly-Traded Security Company In Canada 30 March 2022

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