A private equity firm is in advanced negotiations to acquire a key division of a major British cybersecurity company, paving the way for the latter to focus solely on its core business.
TDR Capital, a London-based investment firm, is in talks to purchase the software escrow unit of NCC Group for around £275 million, according to Sky News. The deal, which could be finalised as early as this week, would leave NCC Group listed on the London Stock Exchange as a pure-play cybersecurity firm.
The software escrow business, which NCC Group acquired in 2013, provides services that help companies ensure the continuity of their critical software applications in the event of a supplier’s failure or other disruptions. This division has been seen as somewhat peripheral to NCC Group’s primary focus on cybersecurity solutions and services.
By divesting the escrow unit, NCC Group would be able to concentrate its resources and expertise on strengthening its core cybersecurity offerings, which have become increasingly vital as businesses and organisations face growing threats from cyber attacks and data breaches.
“This proposed transaction would allow NCC Group to sharpen its focus on its core cybersecurity business, which is experiencing strong demand,” said a person familiar with the negotiations, who spoke on the condition of anonymity as the talks are still ongoing.
The potential sale of the software escrow division comes as NCC Group, a FTSE 250 company, has been working to streamline its operations and enhance its position in the rapidly evolving cybersecurity market. In recent years, the company has made strategic acquisitions and investments to bolster its capabilities in areas such as managed security services and threat intelligence.
TDR Capital, which has a track record of investing in technology and business services companies, is believed to see significant growth potential in the software escrow division, which generates stable and recurring revenue streams.
The proposed £275 million deal would represent a significant return for NCC Group, which acquired the software escrow business for £55 million in 2013. The sale would also provide the company with additional financial resources to further invest in its cybersecurity operations and drive innovation in the field.
If the transaction is completed, it would mark the latest in a series of strategic moves by NCC Group to sharpen its focus and capitalize on the growing demand for robust cybersecurity solutions. As businesses and organisations continue to grapple with the ever-evolving threat landscape, the company’s expertise in this critical area is likely to be in high demand.