viewShearwater Group PLC

Shearwater Group proposes transformational acquisition of cyber-security firm

The proposed acquisition "would substantially broaden Shearwater's cyber-security solutions and services capability", Shearwater said

The board of Shearwater will remain unchanged following completion of the proposed acquisition

Acquisitive data technology firm Shearwater Group plc (LON:SWG) is to buy cyber-security outfit Brookcourt Solutions for £30.3mln.

Shearwater will pay £22.95mln of the consideration in cash with the rest being satisfied in shares. Shearwater, which has a market capitalisation of £44mln, said the deal would be a transformational one for the company. The acquisition is classified as a reverse takeover under AIM’s rules.

READ: Shearwater expects full-year results to be at the upper end

Brookcourt has a strong track record of profitable performance and cash generation, Shearwater said.

For the financial year ended 31 March 2017, Brookcourt generated unaudited revenue of £22.2mln and £2.8mln of earnings before interest, tax, depreciation and amortisation (EBITDA).

The company intends to finance the acquisition through a placing of shares to raise between £25mln and £30mln and is also seeking to raise an extra £1mln through an open offer to shareholders.


Trading in the company’s shares has been suspended.

"This transformational acquisition provides us with a substantial platform from which we can grow organically and by further acquisitions,” said David Williams, the chairman of Shearwater.

Brookcourt’s co-founders, Phil Higgins and Dene Stacey, and the Brookcourt team will be staying on to become part of the Shearwater organisation.

"As well as being strategically and operationally a major development for us, this transaction will also bring a step change in our scale and breadth of offering, and notably it will make us cash-flow positive following completion," Williams said.

Quick facts: Shearwater Group PLC

Price: 235 GBX

Market: AIM
Market Cap: £51.96 m

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