IT acquisition

Truststream Security Solutions acquired in £8.5m deal

Truststream Security Solutions, the Edinburgh-based provider of managed cyber security services, has been acquired by AIM-quoted SysGroup, the managed IT services, cyber security and cloud hosting provider, in a deal worth up to £8.5m.

Liverpool-based SysGroup will pay an initial £4.8m with a maximum earn out of up to £3.075m over a 24-month period. The acquisition has been funded from the Group’s existing cash resources, supported by an £8m revolving credit facility provided by Santander.

Paul Sullivan, co-founder at Truststream, pictured, said: “We’ve experienced rapid growth over the last few years, as organisations of all sizes and sectors demand comprehensive cyber security solutions.

“SysGroup’s impressive reach and forward-thinking use of technology makes this a perfect match, and a natural next step for Truststream.”

With Truststream’s security offering, SysGroup says the deal further enhances its service offering, from threat analysis to detection and incident response. The 10-strong existing Truststream team will enable the group to further strengthen its UK presence and will introduce a reach in to Scotland.

Additionally, SysGroup’s recent investments in business systems and infrastructure mean that Truststream’s services will be quickly and seamlessly integrated into its all-in-one business intelligence platform, meaning both customer bases will have access to an enhanced service offering sooner.

The company, which has offices in Liverpool, London, Manchester, Newport and Telford, has already made a number of significant acquisitions in recent years, including Certus IT for £8m in February 2019 and Hub Network Services for £1.45m in June 2019. The business acquired Telford-based Rockford IT in 2018, expanding its market reach in vertical sectors, such as hotels and leisure.

Adam Binks, chief executive at SysGroup, said Truststream strongly complements the existing portfolio of services and has high levels of recurring revenue.

“In addition, cyber security remains a key priority for businesses of all sizes as threats become both more prevalent and more harmful.”

Established in 2011, Truststream is one of the UK’s fastest growing providers of professional and managed cyber security services.

In the year ended 30 September 2021, it generated unaudited revenues of £3.2m (an increase of 61% year-on-year), EBITDA of £0.8m (an increase of 128% year-on-year) and profits before tax of £0.8m.

Truststream enjoys high levels of recurring revenue which is supported by solid customer and vendor relationships. Managed IT services comprised 63% of total revenues. Its net assets at 30 September 2021 were £0.4m.

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

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