High Wire Networks, a Top 250 MSSP, is putting all its resources into managed security services, selling off all other businesses and becoming a pure play MSSP. Executives signaled that the company may also pursue strategic acquisitions.
The company announced this week that it has sold its technology enablement services business for $11.2 million to ServicePoint in an all cash deal. Proceeds will be used to reduce debt by $5 million and put more cash in the balance sheet.
In addition High Wire’s board of directors approved the holding for sale of the company’s VoIP and data network services subsidiary, Secure Voice Corp. High Wire also said that there’s a tentative sales agreement in place for Secure Voice and the company expects to complete the sale before the end of Q3.
In a LinkedIn post High Wire chairman and CEO Mark Porter said that the combination of High Wire's Technical Services business with ServicePoint IT is an effort "to create one of the biggest and best professional services organizations in the United States. This combined entity will provide our clients with a broader set of services, greater reach, and continue the journey we started so long ago. Many of our great folks will be leading the way forward and continue in their service to our clients." Porter also said that he will serve as an advisor to the ServicePoint venture.
High Wire Networks Goes Pure Play MSSP
As for the MSSP side of the business, he signaled a pure play MSSP strategy going forward in a prepared statement.
“The sale of our technology services business and our anticipated divestiture of Secure Voice will provide additional working capital and streamline our operations from three separate segments into a singular, pure play managed cybersecurity company represented by our Overwatch division,” Porter said in a prepared statement.
“We are now better positioned to move from ‘defense to offense,’ and begin executing on our inorganic growth strategy without the burden of today’s sky-high cost of capital and the overhang of burdensome financial instruments on our operations and market valuation,” Porter added.
For Q1 2024, High Wire reported that total contract value (TCV) for Overwatch reached a record $10.4 million, up 104% from $5.1 million at the end of the same year-ago quarter. Overwatch recurring revenue is currently tracking at more than $5 million on an annualized basis, up by more than 25% compared to the full year of 2023.
“Our cybersecurity business, with its long-term, renewing contracts, provides us a more reliable and predictable revenue stream,” Porter said in the statement. “Such revenue models also tend to garner higher market valuations that enhance shareholder value.”
High Wire Sold Legacy Staffing Business in 2023
The current deal is similar to another one by High Wire Networks that was completed just over a year ago. In March 2023, High Wire Networks sold another one of its legacy businesses, its staffing subsidiary. That deal was priced at $11.5 million and High Wire used the proceeds to eliminate debt payments, reduce fully diluted common shares.
High Wire Preps for Acquisitions
High Wire also recently announced the appointment of Edward Vasko, CISSP, as strategic advisor to help accelerate growth and development of its flagship offering Overwatch.
High Wire said that Vasko brings more than 30 years of experience and entrepreneurial success in the cybersecurity industry, including business formation, driving growth, and leading M&As and exits. He is expected to join the company full time after completing the transition from his current position.
“We anticipate Ed’s vast experience, knowledge and insight with growing cybersecurity businesses and leading M&As will help us expand our Overwatch revenue streams as well as help us identify complementary managed cybersecurity acquisition targets,” Porter said in a statement. “Our strengthened capital resources position us well to pursue such opportunities.”
Will those acquisitions move High Wire Networks up on the Top 250 MSSP list? The company certainly has been working hard to build its business organically. Acquisitions could provide more rocket fuel to push the company higher up on the list.
