Systems integrators are in a race to snap up security MSPs in Europe as the number of potential acquisition targets shrinks, according to ITC Secure Networking CEO Tom Millar.
London-based ITC was acquired on Monday by technology investment firm C5 for £24m, in a move that Millar explained will see the security MSP take its first steps into Europe.
In its most recent full accounts on Companies House ITC reported revenue of £14.3m for the 12 months ending 31 May 2016, a 25 per cent increase on the previous year.
Although ITC has partnered with an investment firm, Millar explained that larger systems integrators contacted him about acquiring the firm but he opted against this to retain control of the company's direction.
UK security VARs have been on the shopping lists of a number of bigger firms over recent years.
Nebulas was acquired by SecureLink in August in a deal backed by InvestCorp - the same private equity firm which merged US cybersecurity providers FishNet Security and Accuvant - as the investor looked to replicate its US model in Europe.
Millar, who will stay on as CEO, claimed that large security providers are currently in a race to grab the "shrinking number of good-quality" security MSPs available for acquisition.
"When you're in a small resource pool, these companies are looking to go out and pick off the ones they want quickly to get those resources because it's a nulling problem," he said.
"I talked to big integrators looking to acquire ITC; there were many and a lot of the normal names you'd pick out of the big companies [making enquiries].
"Rather than build up the capabilities to provide security, monitoring, management, they're trying to buy it because it's just not possible [to start from scratch]."
Millar explained that following the acquisition, he has ambitions to grow ITC to $300m in five years through a European expansion that will see it look to acquire security businesses in mainland and northern Europe.
Millar said that any acquired companies will maintain their independence, and ITC will not look to change them, but will give them access to its NetSure360 security platform.
"We will provide additive to these organisations through our platform NetSure360 as a managed service," he said.
"All we're looking to do is add one additional service line, Netsure 360, which will enable them to sell managed security services to their already existing customer base. We will build out a local capability and help them build a service."
Millar added that he expects European cybersecurity spending to increase next year as organisations prepare for GDPR.
This, along with the lack of quality security MSPs in Europe and the skills shortage in the cybersecurity industry, was a key factor in the ITC expansion plan, he added.
Daniel Freeman, chief investment officer of C5 Capital, said: "We are delighted to have acquired ITC.
"We have been highly impressed by the company's end-to-end security solutions and technology road map, as well as the trusted relationships they have built with a blue-chip customer base.
"We are excited to partner with a great founder-led team to support the company's next phase of growth."
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