Acquisition

RNS Number : 6645K

NCC Group PLC

23 April 2010

 



23 April 2010

NCC Group plc

Acquisition of leading testing services business for £15.0m

NCC Group plc (LSE: NCC, "NCC Group" or "the Group"), the international, independent provider of Escrow and Assurance Testing, has acquired SDLC Solutions Limited (SDLC), a testing services provider for a maximum consideration of £15.0m in cash.

The earnings enhancing acquisition of SDLC complements the Group's existing information security and testing capabilities within its Assurance Division.  It will now enable NCC Group to provide a wider range of information security assurance services.

The initial consideration payable is £7.75m in cash, subject to balance sheet adjustments, 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 Group's existing debt facilities and internally generated cashflow.

For the year ended 30 April 2010, SDLC is expected to report normalised EBIT of £1.5m on revenue of £12m and has gross assets of £3.8m.  The order book and sales pipeline for the next financial year currently stands at approximately £11m with much of the future revenues being derived from recurring contracts with blue chip corporations and system integrators.

Over the last five years NCC Group has secured a leading position in security research, testing, advice and forensics as well as web site performance and load testing through a combination of organic and acquisitive growth.

The acquisition of SDLC widens the Group's assurance capabilities by providing a complementary range of software testing services, including business analysis, project management, test resourcing, network and application performance analysis, functional and non-functional testing, test automation, software testing and tools training.

SDLC will benefit significantly from access and exposure to NCC Group's client base and the opportunities to grow its business as part of a much larger and well established listed group. 

SDLC, which is based in Wilmslow, Cheshire, employs over 70 full time staff, most of whom are testers and over 60 associates. It will be managed autonomously within the Group's Assurance division by SDLC's existing management team and will trade as SDLC Solutions, a NCC Group company.

This acquisition also complements the Group's recent purchase of Meridian Services, a card services auditing and assurance company, that specialises in conducting payment scheme logical and physical security audits, as well as offering global strategic advisory services for card manufacturing, data preparation and card personalisation. See note to editors for full range of services. 

NCC Group expects to publish its Final results on 5 July 2010.

Rob Cotton, 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."

ENDS

Enquiries:

NCC Group 0161 209 5200

Rob Cotton, Chief Executive

College Hill 020 7457 2020

Adrian Duffield/Rozi Morris

There will be an analyst conference call at 8.30am - please contact Lucy Moseley at [e-mail] or on telephone [phone] for details.

Note to editors

NCC Group Assurance Division consists of the following operating business all focused on the delivery of Information Security and Testing solutions.

• Site Confidence - Testing and monitoring relevant aspects of system, network and web site performance to ensure the technology used can deliver optimum performance.

• Secure Test - Penetration and security testing of networks and applications and security policies in practice, to ensure organisations are safe from the constantly evolving threat of unauthorised access.

• NGS - Expert led security assistance, covering forensics, vulnerability research and the development of expert software to aid organisations in their ongoing battle with information security breaches.

• Information Security Advisory - Protecting organisations against a variety of risks through the development and implementation of effective strategies and compliance with relevant Information Security standards and guidelines.

• Meridian International - Specialising in payment card certification audits, Payment Card Industry Data Security Standards (PCI DSS) compliance and global strategic advisory services for card manufacturing, data preparation and personalization vendors.

 

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