Optic Security, a trans-Tasman cyber security firm created in 2018 by rolling up existing businesses, has been sold out of voluntary administration.
Optic Security Group Ltd was the 100 per cent shareholder of Optic Security Finance Group which in turn owned four New Zealand and two Australian subsidiaries. The company is now in liquidation after the November sale of the operating business to New York-based Arena Investors, an existing shareholder.
"Following an extended unsuccessful business sales campaign, on 17 October 2022, the directors resolved that the company is insolvent and that without a solution to its balance sheet and liquidity issues, it would not be possible for the company’s business to continue," the first liquidator's report said.
"It was therefore determined that the appointment of voluntary administrators would result in a better return for the company’s creditors and shareholders than would result from an immediate liquidation of the company."
Three secured creditor claims totalling $84.9 million were received during administration. After the sale to Arena two of those secured parties withdraw their claims and the remaining claim reduced to $28.8 million.
"At this stage, it is unknown if there will be any funds available to make payment to creditors with security interests," the administrators wrote in their report.
Four unsecured creditor claims were received by the administrators totalling $421,130, however, the report by liquidator Grant Thornton also noted a claim against the company by a shareholder prior to voluntary administration, which could result in a further $1 million claim.
"The liquidation only concerns the capital structure of the ultimate holding company," Optic Security Group said in a statement. "The operational company, Optic Security Group, is trading profitably under new ownership, and it is not affected by the capital restructure. There were no trading difficulties."
There were no remaining unpaid third parties, the spokesman said.
"The only outstanding debt is to related parties. The secured party has left some secured debt as part of the capital restructure, which is why it is reported the way it is."
The sale of the business saw intercompany loans offset and some forgiven, in addition to significant repayment of the senior secured debt.
Optic Security Group rolled up six physical and cyber security companies with a combined revenue of over $100 million.
Operating initially from 18 sites across A/NZ, the group claimed to have now formed the region's largest independent physical, IT and information security group.
Optic Security brought together Auckland-based physical security company Fortlock, which had earlier acquired Wellington IT experts Comsmart (later to be rebranded as Optic Digital), as well as Wellington-based Circuit Systems and Auckland's SSL.
In Australia, Optic Security added Adelaide-based Security & Technology Services and Sydney-based Bemac.
On 4 November, Arena said it was providing the business with new ownership "suitable for the long term". The investor said it would work with Optic as it expanded its solution portfolio for converged security projects across A/NZ while assessing broader markets in the APAC region.
"Having worked with Optic since 2018, we are excited to finally be on a path towards greatly expanding and enhancing the Optic business," said Todd Strathdee of Arena Investors. "We have come to appreciate Optics' superior capabilities, alongside their commitment to industry-leading service standards."
Mark Lloyd, managing director of Optic Security said as the need for both physical and digital security platforms elevated, Arena’s commitment and future support would enable Optic to expand its offerings in both product and geography while not compromising service standards.
In 2020, Australian cyber security provider Tesserent inked a 50/50 joint venture agreement with Optic Security providing a route into the NZ market to expand its Cyber 360 strategy, which had seen it go on aggressive acquisition push.