Edinburgh cybersecurity specialist bought by Liverpool firm
EDINBURGH-based cybersecurity specialist Truststream Security Solutions has been acquired by a Liverpool firm in a deal that appears to have put its two founders in line for payments of more than £1million each.
The acquisition reflects growing investor interest in technology companies in Scotland. Renfrew-based Beeks Financial Cloud revealed yesterday that it won a strong response to a £15m fundraiser launched on Monday. The equity placement he made was “significantly oversubscribed”.
Truststream Security Solutions has been acquired by SysGroup in a deal worth up to around £8 million.
SysGroup said the acquisition will allow it to add Truststream’s “comprehensive security offering” to the range of services it provides and expand its reach in Scotland. The 10 Truststream employees will join Aim-listed SysGroup, which also has offices in London and Manchester.
SysGroup said it believes there are significant cross-selling opportunities between the two companies’ customer bases.
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The acquisition reflects Truststream’s success under the leadership of founders Paul Sullivan and Bryan Thomson in the rapidly growing cybersecurity market.
SysGroup said Truststream is one of the fastest growing professional and managed cybersecurity service providers in the UK. He noted that Truststream’s offering covers “all aspects of cybersecurity, from threat analysis and detection, through protection architecture and implementation, to incident response and 24/7 ongoing support and training.
The company increased its revenue by around 60%, to £3.2million, in the year to September 30. It increased its underlying profit by 128% to £0.8m.
SysGroup chief executive Adam Binks noted that Truststream has high levels of recurring revenue.
He observed, “Cybersecurity remains a key priority for businesses of all sizes, as threats become both more widespread and more damaging.
Mr Sullivan said the acquisition would allow Truststream to benefit from SysGroup’s reach after growing rapidly in recent years.
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Truststream was founded in 2011. Companies House records show that Mr Sullivan and Mr Thomson each owned more than 25% of the company’s shares.
SysGroup has agreed to pay an upfront cash consideration of £4.8 million with a gain of up to £3.075 million payable based on Truststream’s performance within two years of closing the transaction.
He said Mr. Sullivan and Mr. Thomson will continue in their current roles with the expanded SysGroup team for a minimum of two years.
Mr Binks said the acquisition would support SysGroup’s strategy to become the leading provider of managed IT services for the UK middle market. The group has made a series of acquisitions in recent years.
Beeks Financial Cloud on Monday announced plans for a £15m fundraise as the company seeks to maintain the rapid growth it has achieved as a provider of technology that can be used to speed up trade execution on financial products. Its clients include major financial institutions.
In announcing fundraising plans, the group said it continues to operate successfully in a demanding and time-sensitive industry.
“Admins believe Beeks is well positioned to further capitalize on the rapidly accelerating cloud deployment in financial services and the growing need for analytics around these infrastructure environments,” the company noted.
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He said part of the funds will be used to support the launch of a new product designed for global exchanges and electronic communication networks, which they can resell to their customers. The product, Exchange Cloud, is expected to significantly increase the addressable market for Beeks’ technology.
New and existing shareholders supported the fundraising, which was completed at 165 pence per share.
Shares of Beeks Financial Cloud closed up 2.5p at 175p.
The company employs 68 people in Renfrew out of a total of 95.
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Private equity investors and business angels have backed a range of tech companies in Scotland in recent years. Companies added to the BGF investment deal’s portfolio last year included Glasgow-based information technology group Kick ICT and Odro, which provides video interviewing and engagement software to the recruitment industry .