Shearwater Group plc is acquiring penetration testing business assets from UKFast subsidiary Secarma, in a share and loan note deal worth £7.4m. The transaction effectively gives Secarma a 13.3% stake in the Shearwater Group, as Manchester-headquartered hosting firm UKFast spreads its security footprint.
The acquired assets, including customers and some staff, will be rebranded as Pentest, creating a new Shearwater group subsidiary. Pentest provides threat analytics and monitoring, and tailored "red teaming" operations through its cyber security and ethical hacking specialists, which can simulate an attack on a customer's network environment to test its ability to withstand an attack.
David Williams, chairman of Shearwater, said: "Over the past year we have witnessed a substantial and growing demand for cyber security testing services and red teaming in particular. We've looked at a number of opportunities in this sector and we're delighted to have secured a deal to purchase this business.”
He said: "The incoming team's industry expertise and considerable experience as well as market position will be very complementary to our services businesses and provides another key capability for the group as a whole."
Established in 2001, the original Pentest business was acquired by Secarma in 2016, and has gone on to build a customer base of over 250 clients, including a number of long-standing relationships with major multinational companies in the UK, the US and Europe.
The brand will return to Pentest on acquisition and will form a separate subsidiary company within Shearwater, benefiting from cross selling opportunities across the group, said the firm.
For the 12 months ended 31 May 2018, Pentest generated unaudited revenue of £3.7m and an unaudited profit before tax of £120,000. It had gross tangible assets of £2.8m, including customer contracts, own proprietary software, employees and other tangibles.
The total deal of £7.4m includes a £700,000 unsecured loan note repaid in tranches on the first and third anniversary of the acquisition completion. UKFast founder and CEO Lawrence Jones (pictured), said: “Secarma continues to go from strength to strength and we have laser focus on the direction we want to take the business. Our fast-growing cloud security division is where we’re focussing our attention.
“Within UKFast, we’re developing our security operations centre, our threat monitoring service and just last week, we announced a £4m investment in our global DDoS protection network DDoSX. These products sit incredibly well alongside Secarma’s cloud security division.”
He said Shearwater has a long-standing relationship with Secarma and will continue to collaborate across certain projects.Shearwater's Williams added: "Secarma is going to be a meaningful shareholder in Shearwater Group and we're looking forward to working closely together for the benefit of all parties."
