Private equity firm exits cyber security company after sale to American specialist
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YFM Equity Partners had sold its shareholding in Malvern cyber security firm Deep Secure to Texan group Forcepoint Federal.
Forcepoint Federal is a global cyber security solutions business specialising in serving government and critical infrastructure clients.
The transaction, for an undisclosed sum, is expected to close in or before August.
Deep Secure is a provider of cyber security defence solutions, pioneering the Threat Removal approach to deliver assured malware-free information exchange for its customers.
It was backed by YFM Funds, including British Smaller Companies VCT plc and British Smaller Companies VCT2 plc. The exit will deliver a money multiple return of 6.5x for the investors.
YFM is understood to have invested £4m in the Worcestershire-based company, in 2009 and 2017.
Dan Turner, chief executive of Deep Secure, said: “Deep Secure has scaled strongly with YFM’s support, developing an exciting and ground-breaking approach to cyber security.
“We have worked very closely with YFM, who have been a hugely supportive partner, to invest in our technology as well as the sales and operational capabilities of the business to execute our successful strategy.”
Eamon Nolan, partner at YFM, added: “We backed an ambitious management team at Deep Secure that has delivered on its strategy to develop a market-leading approach to cyber security.
“Deep Secure has developed exciting technology in the increasingly vital area of cyber defence and has grown revenues and profits significantly.
“We are delighted to have delivered strong returns for our investors with this exit.
“Forcepoint is the ideal strategic acquirer of Deep Secure to enable both businesses to continue supporting the UK Prosperity agenda, to continue to develop the product range their customers need, and to address the ever increasing need for security and protection to a wider audience.”
YFM and the management team were advised by Ernst & Young Corporate Finance (Markus Salolainen and Richard Jacklin) and Gateley Legal (Rebecca Grisewood, Kate Richards, Victoria Brown).