NCC continues shopping spree with £15m swoop

NCC Group, the listed IT security and assurance company, has continued its North West shopping spree with a £15m swoop for Wilmslow-based company SDLC Solutions.

Manchester-based NCC said the swoop for SDLC, which is a profitable £12m turnover company with 70 staff, would complement its existing information security and testing capabilities within its Assurance division.

NCC, which last month bought Warrington-based Meridian Services for £3m, said the latest deal would allow it to offer a wider range of information security assurance services.

The initial consideration payable is £7.75m in cash,  with two further payments of up to £7.25m in total against performance related targets over the next 26 months. 

The acquisition will be financed from NCC’s existing debt facilities and internally generated cashflow.

For the year ended 30 April 2010, SDLC is expected to report normalised earnings o £1.5m on revenue of £12m and has gross assets of £3.8m.

Its order book and sales pipeline for the next financial year is around £11m with much of the future revenues coming from recurring contracts with blue chip corporations and system integrators.

Rob Cotton, pictured, NCC Group chief executive, said: “SDLC is one of the UK’s most respected testing services companies.

“Its addition to the group will enable us to provide a total assurance service by including functional testing. 

“We are now able to offer our clients the ability to mitigate risk throughout every stage of their IT infrastructure, software and information security decision making. 

“Introducing our information security services and clients to SDLC’s extensive expertise will further strengthen our position, whilst we will be able to provide a wider range of services to SDLC’s client base.

“We are confident that the management team will continue to maintain their excellent track record of revenue and profit growth, supported by our resources and the group’s wider client base.”

Mr Cotton said NCC would now focus on integrating SDLC and Meridian into the business.

“I’m really delighted, it’s an excellent business. We’re still open to opportunities and I would expect there to be another deal before the end of the calendar year. The key thing now is to digest what we’ve got.”

Daniel Liptrott, corporate partner at Eversheds in Manchester advised NCC on the SDLC and Meridian deals. He was assisted by associate, Edward Bartlett.

Mr Liptrott said: “NCC Group’s strategic acquisitions of SDLC and Meridian Services solidify its leading position in security research, testing, advice and forensics.

“The ability of NCC Group to make these acquisitions back-to-back is testimony to the excellent working relationship that exists between Eversheds and NCC Group and its advisers.”

NCC Group expects to publish its annual results on July 5.