HUB Cyber Security Updates on Final Steps Towards the Closing of its Transformative Acquisition of BlackSwan Technologies

Rhea-AI Summary

HUB Cyber Security (NASDAQ: HUBC) announces progress in its acquisition of BlackSwan Technologies, with the definitive agreement signed on January 15, 2025. The transaction is expected to close around January 28, 2025, pending completion of routine regulatory and contractual requirements.

According to CEO Noah Hershcoviz, this transformative acquisition aims to position HUB as a potential market leader in secured data fabric solutions. The deal is anticipated to create opportunities for cross-selling and cost optimization, potentially accelerating profitability and cash flow generation.

Positive

• Strategic acquisition to strengthen market position in secured data fabric solutions
• Potential for cross-selling opportunities and cost optimization
• Expected acceleration of profitability and cash flow generation

Negative

• Transaction still subject to regulatory and contractual requirements
• Integration risks and execution uncertainty

Insights

Financial Analyst

The pending acquisition of BlackSwan Technologies by HUB Cyber Security marks a pivotal strategic maneuver in the rapidly evolving cybersecurity sector. While the announcement lacks important financial details, several key implications warrant careful consideration:

Strategic Positioning & Market Dynamics: This acquisition positions HUB to potentially capture a larger share of the data fabric solutions market, a segment experiencing accelerated growth due to increasing data complexity and security requirements. The timing is particularly relevant as organizations globally are prioritizing integrated security and data management solutions.

Integration & Synergy Potential: The emphasis on cross-selling opportunities suggests significant revenue synergies, likely stemming from complementary product portfolios and customer bases. Cost optimization mentions hint at potential operational synergies, though the lack of specific targets or timelines raises questions about the scale of these benefits.

Execution Considerations: Several critical factors require monitoring:

• Integration complexity and timeline for realizing synergies
• Potential customer overlap and retention strategies
• Technology stack integration challenges
• Impact on cash flow and balance sheet strength

Market Impact: The rapid progression from signing (January 15) to expected closing (January 28) suggests regulatory hurdles and well-aligned stakeholder interests. However, this accelerated timeline also raises questions about thorough due diligence and integration planning.

The characterization of this deal as "transformative" and "game-changing" by management indicates significant strategic importance, but investors should note that successful execution will be important for realizing the promised value. The focus on profitability acceleration and cash flow generation suggests confidence in near-term financial improvements, though the absence of specific metrics or targets necessitates careful monitoring of post-merger performance indicators.

TEL AVIV, Israel, Jan. 23, 2025 (GLOBE NEWSWIRE) -- via IBN – HUB Cyber Security Ltd. (NASDAQ: HUBC) (“HUB”; or the “Company”), a leading provider of cybersecurity solutions and advanced data fabric technology, is pleased to announce that the transaction process for the acquisition of BlackSwan Technologies, Inc. (“BlackSwan”) is on track, with the definitive agreement having been signed on January 15, 2025, as previously announced. The final steps towards closing are focused on completing routine regulatory and contractual requirements, and the transaction is expected to close on or about Tuesday, January 28, 2025.

HUB’s management remains focused on completing the transaction with the utmost diligence and care to ensure a smooth and proper conclusion for the benefit of HUB and its shareholders.

Noah Hershcoviz, CEO of HUB Cyber Security, commented:
"We are thrilled about this transformative acquisition, which positions HUB as a potential market leader in secured data fabric solutions. This deal is expected to unlock significant opportunities for cross-selling and cost optimization that could accelerate profitability and cash flow generation. We eagerly anticipate closing this important game-changing acquisition next week."

About HUB Cyber Security Ltd.
 HUB Cyber Security Ltd (“HUB”) was established in 2017 by veterans of the elite intelligence units of the Israeli Defense Forces. The Company specializes in advanced cybersecurity solutions that protect sensitive commercial and government information. HUB’s offerings include encrypted computing technologies that prevent hardware-level intrusions and innovative data theft prevention solutions. Operating in over 30 countries, HUB serves a diverse client base with its cutting-edge cybersecurity appliances and services.

Forward-Looking Statements
 This press release contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated benefits to HUB of the acquisition of BlackSwan, anticipated market opportunity, and the anticipated timeline to closing the transaction. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “future,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “seem,” “should,” “will,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of HUB Security, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties, or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made with the SEC by the HUB Security and the following: (i) significant uncertainty regarding the adequacy of HUB Security’s liquidity and capital resources and its ability to repay its obligations as they become due; (ii) the war between Israel and Hamas commenced in October 2023, and the expansion of hostilities to other fronts, which may harm Israel’s economy and HUB Security’s business; (iii) expectations regarding HUB Security’s strategies and future financial performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and HUB Security’s ability to invest in growth initiatives and pursue acquisition opportunities; (iv) the outcome of any legal or regulatory proceedings against HUB Security in connection with our previously announced internal investigation or otherwise; (v) the ability to cure and meet stock exchange continued listing standards and remain listed on the Nasdaq; (vi) competition, the ability of HUB Security to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (vii) limited liquidity and trading of HUB Security’s securities; (viii) geopolitical risk, including military action and related sanctions, and changes in applicable laws or regulations; (ix) the possibility that HUB Security may be adversely affected by other economic, business, and/or competitive factors; (i) other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in HUB Security’s Annual Report on Form 20-F/A filed on October 22, 2024. In addition, there can be no assurance that the closing conditions in the merger agreement with BlackSwan will be satisfied in a timely basis or at all.

Should one or more of these risks or uncertainties materialize, or should any of the assumptions made by the management of HUB Security prove incorrect, actual results may vary in material respects from those expressed or implied in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the business combination or other matters addressed in this press release and attributable to HUB Security or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in the press release. Except to the extent required by applicable law or regulation, HUB Security undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this press release to reflect the occurrence of unanticipated events.

Investor Relations:
 Lytham Partners
Ben Shamsian
646-829-9701
shamsian@lythampartners.com 

Wire Service Contact:
IBN
Austin, Texas
www.InvestorBrandNetwork.com
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FAQ

When is HUB Cyber Security (HUBC) expected to close the BlackSwan Technologies acquisition?

The acquisition is expected to close on or about Tuesday, January 28, 2025.

What are the expected benefits of HUBC's BlackSwan Technologies acquisition?

The acquisition is expected to position HUB as a potential market leader in secured data fabric solutions, create cross-selling opportunities, optimize costs, and accelerate profitability and cash flow generation.

When was the definitive agreement for HUBC's acquisition of BlackSwan Technologies signed?

The definitive agreement was signed on January 15, 2025.

What remaining steps are needed to complete HUBC's acquisition of BlackSwan Technologies?

The final steps involve completing routine regulatory and contractual requirements before the expected closing date.