A rapidly growing eastern Ontario security firm that specializes in serving the cannabis sector has acquired a Toronto-based armoured transport company in a move it hopes will set the stage for further expansion in Canada and the United States.
Almonte-based 3|Sixty Risk Solutions (CSE:SAFE), which operates as 3|Sixty Secure Corp., announced this week it has purchased INKAS Security Services (ISSL). The 200-person Toronto firm, a division of the INKAS Group of Companies, provides secured transport, ATMs and other security services to cannabis producers, government organizations, financial institutions and other businesses.
Pending approval, the $13.75-million cash-and-stock deal will boost 3|Sixty’s workforce to more than 600, according to a news release. The addition of ISSL, which has more than 50 armoured vehicles serving customers in Ontario, Alberta and Quebec, will nearly double the size of the firm’s fleet.
In the news release, 3|Sixty said the deal will add 16 cannabis operators to its client base of more than 60 and further diversify its customer base. The company said bringing ISSL into the fold will help it build a “powerful platform for accelerated growth in Canada and the USA.”
The move is poised to give a healthy boost to 3|Sixty’s top line. Under the agreement, $1.75 million of the purchase price is contingent upon ISSL hitting revenue targets of $15 million in the first year and $20 million the second year after closing.
3|Sixty CEO Thomas Gerstenecker said in a statement the transaction is the next step in the company’s “rapid growth” from a small regional provider to a national presence. Gerstenecker said the acquisition makes his company “one of the largest cannabis sector secure transportation outfits and one of the largest cash management operators” in the country.
“This speaks volumes to the growth of the cannabis industry and the demand for focused and dedicated services,” he added. “We are excited and pleased to welcome ISSL to continue the push for an even greater future.”
Founded in 2013, 3|Sixty provides secured transportation for cannabis producers and distributors across Canada, including Canopy Growth and the government-run Ontario Cannabis Store, delivering more than $250 million worth of product each month. The company says its vehicles are specifically tailored to transporting pot, with climate-control features and cannabis-specific insurance coverage.
The firm also provides risk assessments, security audits and training to customers in the cannabis, policing, oil and gas and mining industries. It recently inked a multi-year deal to provide security guards at LCBO outlets in the eastern, western and northern parts of the province.
After amalgamating with Toronto-based competitor Total Cannabis Security Solutions in late 2018, 3|Sixty went public on the Canadian Securities Exchange via a reverse takeover in January.
3|Sixty’s stock was down two cents to 47 cents in late-afternoon trading on Thursday.