May 23, 2024


Digitally first class

Multi-million pound sale of Edinburgh cyber security specialist highlights investor interest in Scottish technology firms


SysGroup chief executive Adam Binks has clinched the acquisition of a fast-growing Scottish technology firm Picture: SysGroup

SysGroup chief executive Adam Binks has clinched the acquisition of a fast-growing Scottish technology firm Picture: SysGroup

EDINBURGH-based cybersecurity specialist Truststream Security Solutions has been acquired by a Liverpool firm in a deal that looks to have put its two founders in line for payouts of more than £1m each.

The acquisition reflects booming investor interest in technology firms in Scotland. Renfrew-based Beeks Financial Cloud revealed yesterday that it had won a strong response to a £15m fundraising it launched on Monday. The share placing it completed was “significantly oversubscribed”.

Truststream Security Solutions has been acquired by SysGroup in a deal worth up to around £8m.

SysGroup said the acquisition will allow it to add Truststream’s “comprehensive security offering” to the range of services it provides and extend its reach into Scotland. Truststream’s 10 employees will join Aim market-listed SysGroup, which also has offices in London and Manchester.

SysGroup said it believes that there are significant cross selling opportunities between the client bases of both the two firms.

READ MORE: Edinburgh financial technology business sold to US investors in bumper deal

The acquisition reflects the success Truststream has enjoyed under the leadership of founders Paul Sullivan and Bryan Thomson in the cybersecurity market, which is expanding rapidly.

SysGroup said Truststream is one of the UK’s fastest growing providers of professional and managed cyber security services. It noted that Truststream’s offering covers “all aspects of cyber security from analysis and threat detection, through protection architecture and implementation, to incident response and ongoing 24/7 support and training”.

The company grew revenues by around 60 per cent, to £3.2m, in the year to September 30. It grew underlying earnings by 128% to £0.8m.

SysGroup’s chief executive, Adam Binks, noted that Truststream has high levels of recurring revenue.

He observed: “Cyber security remains a key priority for businesses of all sizes as threats become both more prevalent and more harmful.”

Mr Sullivan said the acquisition would allow Truststream to benefit from SysGroup’s reach after experiencing rapid growth over the last few years.

READ MORE: Fungus specialist secures £550,000 backing as it looks to encourage tree growth across UK

Truststream was founded in 2011. Companies House records show Mr Sullivan and Mr Thomson each owned more than 25% of the company’s shares.

SysGroup has agreed to pay an initial cash consideration of £4.8m with an earn out of up to £3.075m payable depending on Truststream’s performance in the two years following completion of the deal.

It said Mr Sullivan and Mr Thomson will continue in their current roles as part of the wider SysGroup team for a minimum period of two years.

Mr Binks said the acquisition would support SysGroup’s strategy to become the leading provider of managed IT services to the UK mid-market. The group has made a series of acquisitions in recent years.

HeraldScotland: Beeks Financial Cloud chief executive Gordon McArthur

HeraldScotland: Beeks Financial Cloud chief executive Gordon McArthur

Beeks Financial Cloud chief executive Gordon McArthur

Beeks Financial Cloud announced plans for a £15m fund-raising on Monday as the company looked to maintain the rapid growth it has achieved as a provider of technology that can be used to speed up the execution of trades in financial products. Its customers include big financial institutions.

In the announcement of the fund-raising plans the group said it continues to operate successfully in a demanding, time-sensitive industry.

“Directors believe that Beeks is well positioned to take further advantage of the rapid acceleration of Cloud deployment in financial services and the growing need for analytics around those infrastructure environments,” noted the company.

READ MORE: Beeks grows profits and creates jobs amid pandemic challenges

It said some of the funds would be used to support the launch of a new product designed for global exchanges and electronic communication networks, which they will be able to sell on to their customers. The product, Exchange Cloud, is expected to increase the addressable market for Beeks’s technology significantly.

New and existing shareholders supported the fundraising, which was completed at 165p per share.

Shares in Beeks Financial Cloud closed up 2.5p at 175p.

The company employs 68 people in Renfrew out of a total of 95.

READ MORE: Investment firm lines up ‘exciting’ deals in Scotland after £60m boom in activity in 2021

Private equity investors and business angels have backed a range of technology firms in Scotland in recent years. The firms added to the BGF investment operation’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.


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