SecureData UK aims for mid-market dominance after MBO

Firm formerly known as MIS looks to buy and grow its way to £50m as former parent opts to throw all its weight behind African business

Just four years after buying MIS, South African IT group SecureData has pulled out of the UK after agreeing to sell its local arm for £16.6m.

Johannesburg-listed SecureData kicked off what was planned to be a European expansion drive by acquiring Check Point, Juniper and Websense partner MIS in 2008 for £13.3m.

However, just four years on, SecureData has agreed a sale of the business – which is now known as SDH UK – to a recently established special purpose vehicle, SDH Bidco. The move effectively represents an MBO.

SDH director Etienne Greeff told ChannelWeb that the plan is to grow sales and become the UK's leading independent mid-market security outfit. An acquisition warchest is available, he added, and the firm intends to play the consolidator.

"From our point of view it is a really exciting time; we wanted to do this four years ago [when we were bought by SecureData]," he said. "If you look the big security players like Integralis and Vistorm, they have all been subsumed by even larger players. We have a pool of funds available and our vision is to grow to a £50m organisation."

SecureData's African business has struggled in the past year or two and in today's statement the firm said its UK business had become a distraction.

"...Notwithstanding SecureData Europe's noteworthy performance over the past four years, a lack of focus on SecureData Africa has resulted in a significant reduction in profitability for the group," the firm said in a Stock Exchange announcement this morning.

"Consequently, SecureData's share price has declined to a value significantly lower than the intrinsic value of its underlying operations and as a result, the Board has resolved to dispose of SDH UK, and to once again focus on its African operations."

SDH UK is currently 80.8 per cent owned by SecureData. Greeff, along with fellow director Matthew Tomlinson and assorted other SDH UK employees, own the remaining 19.2 per cent.

SDH UK's management team - and the director of SDH UK subsidiary SDH Europe, Andrew Cooke - intend to obtain an equity stake in SDH Bidco.