Magnet Forensics Acquires Evidence Software Company DME Forensics in $ 9 Million Deal
Digital investigative software startup Magnet Forensics has acquired U.S. video and multimedia evidence solutions company DME Forensics in a $ 9 million deal.
The purchase marks Magnet Forensics’ first since its IPO on the Toronto Stock Exchange (TSX) in April and the third acquisition overall.
Magnet Forensics acquires DME as part of its US subsidiary. The deal consists of an initial cash consideration of $ 6.75 million, plus a two-year earn-out of $ 2.25 million based on the achievement of certain integration-focused goals. DME employees and management are ready to stay and be a part of Magnet Forensics.
DME is a startup itself, founded in 2012 by Jimmy Schroering, a former forensic examiner for the Audio, Video, and Forensic Image Analysis Unit of the US Federal Bureau of Investigation.
DME is developing video and multimedia evidence solutions, including one that allows investigators to retrieve video evidence and metadata from digital video recording systems (DVRs) in a “legally reliable manner”. The technology is used by more than 900 public safety organizations in more than 80 countries. Uses of the software cover the investigation of terrorism, civil unrest, homicides, property crimes, child exploitation and other crimes.
The technology complements Magnet Forensics quite well, as the company’s software acquires, analyzes, and shares evidence from computers, smartphones, tablets, and IoT-related devices. Kitchener-Waterloo-based Magnet Forensics said the acquisition allows it to integrate DME’s technological capabilities into its own digital survey solutions. The startup also plans to continue selling DME’s DVR product through its own sales and distribution channels.
“Consolidating video evidence with other types of data is an important part of Magnet Forensics’ vision,” said Adam Belsher, CEO of Magnet Forensics. “We are building a comprehensive, analytics-powered digital investigation platform to help our clients identify and report critical evidence in a timely and accurate manner. DME’s video forensic capabilities further strengthen and expand our platform in this growing segment of digital investigations. “
Founded in 2010, Magnet Forensics is a team that includes a number of former BlackBerry employees, including Belsher who was vice president of Verizon Business within the company. Former BlackBerry CEO Jim Balsillie also sits on the board of Magnet Forensics.
The ten-year-old company has seen notable success to date, with its initial public offering that grossed $ 115 million. Magnet Forensics has seen its share price rise since entering the market at $ 22.50 per share, reaching a high of $ 64.90 at the end of August. Following the announcement of the deal, Magnet Forensics stock price was $ 51.12 at the time of publication.
In its latest quarterly report, the company reported revenues of C $ 20.6 million, an increase of 42% from the previous quarter. At the time, Belsher attributed this growth to the fact that Magnet Forensics continued to gain new customers and grow its existing accounts. “This performance brought our ARR to almost $ 50 million,” said the CEO. “Our pipeline of new opportunities is strong and the new offerings we have launched are gaining ground in the market. “
In early August, Magnet announced a collaboration with the London Metropolitan Police and Microsoft Azure to transform the way law enforcement agencies investigate crimes with relevant digital evidence from smartphones and computers with its software. Magnet Forensics says its products are used by more than 4,000 public and private sector customers in more than 90 countries.