Shearwater Group plc is acquiring independent UK-based cyber security solutions company Brookcourt for £30.3m. Established in 2005, Brookcourt has multiple FTSE 100 and FTSE 250 customers across a variety of industry sectors. Phil Higgins, co-founder and chief executive officer of Brookcourt, along with his executive team, will be staying on to run the firm.
For the financial year ended 31 March 2017, Brookcourt generated unaudited revenue of £22.2m and EBITDA of £2.8m. For the 12 months ended 31 March 2018, Brookcourt made unaudited sales of £20.9m and an adjusted EBITDA of £2m.
The lower year-on-year figures have been put down to “increased business development activity during the year”, which has resulted in a “number of significant new customer contract wins falling into financial year ending 2019”.
Shearwater, which has recently acquired other cyber security services firms, said the deal would “substantially broaden” the group's cyber security solutions and services capability, and “facilitate access to a complementary, large enterprise client base”.
Over the last 18 months, Shearwater has acquired GeoLang for £1.7m, SecurEnvoy for £20m and Newable Consulting for £600,000.
Shearwater said it would be retaining existing Brookcourt management to lead the expansion of the operation, and support the further development of the business' cyber security and managed service solutions.
The purchase includes £22.95m in cash and £7.35m in shares. Shearwater is proposing to fund the deal through raising between £25m and £30m from the placing of new ordinary shares, and a separate £1m open offer of new ordinary shares.
David Williams, chairman of Shearwater, said: "This transformational acquisition provides us with a substantial platform from which we can grow organically and by further acquisitions. One of the key elements of our buy and build strategy is that the management teams stay with the business and become active parts of the enlarged group.
“This transaction will also bring a step change in our scale and breadth of offering, and notably it will make us cashflow positive following completion."
