Shearwater Group plc, the digital resilience group, with an office in Preston, has today entered into a conditional agreement to acquire the entire issued share capital of Brookcourt Solutions Limited, a leading independent UK-based cyber security solutions company, for total consideration of £30.3 million.
Established in 2005, Brookcourt specialises in the provision of cyber security and network solutions within complex, advanced threat landscape and has won over 20 industry awards to date.
Brookcourt has longstanding customer relationships with multiple FTSE 100 and FTSE 250 companies across a variety of industry sectors, as well as a strong track record of profitable performance and cash generation – for the financial year ended 31 March 2017, Brookcourt generated unaudited revenue of £22.2 million and £2.8 million of EBITDA
The proposed acquisition represents a transformational deal for Shearwater, since it substantially broadens the Group’s cyber security solutions and services capability, facilitating access to a complementary, large enterprise client base.
It will also create a strong platform to drive organic and acquisitions growth, within a fragmented cyber security services and solutions market, as well as giving access to a highly experienced management team, who are remaining with the Group to lead the expansion of Brookcourt, and support the further development of the business into cyber security and managed service solution.
The enlarged Group is expected to be cashflow positive following acquisition, based on a total consideration of £30.3 million, payable £22.95 million in cash and £7.35 million in Consideration Shares. This involves a proposed placing of between approximately £25 million and £30 million and open offer of up to £1 million to fund the Proposed Acquisition and provide additional working capital for the Enlarged Group.
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 – I am therefore delighted that Phil, Dene and the Brookcourt team are joining us.
“As well as being strategically and operationally a major development for us, 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.”
Phil Higgins, Co-founder and Chief Executive Officer of Brookcourt, said: “We had a number of options to develop and grow our business, but were very much drawn to joining Shearwater owing to our shared vision and the real opportunity to be part of a rapidly growing PLC. This unity provides us with the resources, additional industry expertise and support to scale the business in delivering a broader solutions offering to our existing and prospective customers.
“We are delighted to be joining Shearwater at such a pivotal time in Brookcourt’s development and we very much look forward to realising our ambitions for the business as part of the wider group.”
