C5 Capital, a technology investment firm focusing on the cyber security, data and cloud computing sectors, has acquired ITC Secure Networking for GBP24 million.
The acquisition marks the fund’s fourth investment following its investments in Metrasens, a UK based sensor company; Omada, a provider of identity and access management technology; and Balabit, a software company focusing on real-time user behaviour analytics for the identification of internal and external attackers.
ITC was established in 1995 by CEO Tom Millar and is headquartered in Docklands London. It provides organisations with assured IT and specialises in providing its NetSure360 managed infrastructure and security services (MSS) to some of the best known companies in the UK. The company designs and integrates secure IT network infrastructures that enhance performance, safeguard information and simplify management.
Along with the entire management team, Millar will remain with the business as CEO and will continue to be a major shareholder.
ITC has won and retained a wide range of mid, large-cap and FTSE 100 clients including British American Tobacco, ABInBev, the Financial Conduct Authority, BT and Orange, as well as a number of companies operating in highly regulated markets such as CLS Services, Mizuho, ICAP, Old Mutual and Canaccord Genuity.
ITC, which currently employs 100 people, increased its revenues more than 20 per cent year-on-year in the last three years. In the last financial year the company achieved revenues of GBP14.5 million.
The acquisition is the first step of C5’s broader strategy to consolidate the fast-growing and fragmented IT MSS market in Europe and provide outsourced cyber security services. C5 has identified ITC, an established UK provider of MSS with a broad technology platform and strong product roadmap, as its first acquisition and the foundational investment in this strategy.
The cyber security market continues to grow at a rapid pace driven by advanced IT threats that are growing in frequency, sophistication and in severity. The increasing prevalence of cybercrime is thought to cost the UK economy more than GBP27 billion per annum, with Mckinsey & Company reporting that globally cybercrime has become more profitable than the illegal drugs trade, generating revenue in excess of GBP2 trillion per annum in 2015. This has forced businesses to significantly expand IT security budgets in order to stay secure and comply with both customer requirements and a growing body of regulatory obligations. Last year the US Federal Bureau of Investigation said that the total realised fraud from compromised business emails was over USD3 billion globally.
In Europe, GDPR (General Data Protection Regulation) will soon apply to all companies with over 250 employees, and will allow regulators to apply penalties of up to 4 per cent of the company’s global revenues. These factors are expected to be game-changing for level of investment European businesses are willing to make in their cyber security.
C5 had already started working closely with ITC in advance of completing this transaction to create value for the company and its clients. This will enhance the company’s ability to bring new talent into the business and to continue developing and delivering best in class end-to-end security solutions and services to its customers. ITC will also benefit from C5’s experience investing in cyber security, data analytics and cloud computing.
ITC was advised by BDO and Stevens & Bolton. C5 was advised by DLA Piper.