SecureData slams lack of viable acquisition targets

But still plans to hoover up three more VARs following purchase of Quadrant Networks

Buy-and-build security VAR SecureData has lamented the lack of quality takeover targets after locking down its first acquisition.

The Websense, Check Point and Juniper partner yesterday bought application acceleration specialist Quadrant Networks and is aiming to tie down one or two more deals by next July to help it reach its £50m-turnover goal.

However, SecureData managing director Etienne Greeff said suitable targets are thin on the ground.

"This is hopefully the first of many but the challenge is that quality companies are quite scarce," he said.

"A lot of pure product resellers are valuing themselves like services companies and some reality checks need to happen. Some deals have not gone ahead just because our valuation has varied so much from theirs."

Greeff said SecureData, which is now backed by August Equity following its MBO from its South African parent, has eyes only for targets that can catapult it into adjacent markets or strengthen bonds with key vendors.

Surrey-based Quadrant bolsters its ties with F5 Networks and thrusts it deeper into the datacentre and application acceleration space, Greeff said. Arbor, Infoblox and ExtraHop are among the other key vendors it punts to a blue-chip client base that includes some large financial institutions.

Greeff (pictured) said: "[The datacentre] is one area we have not been as strong. Integralis and others all have presence in that space and we need traction there – Quadrant gives us that.

"Quadrant is not massive, but it is a significant player in that space – Integralis will not do as much as they do there. But the deal is transformational beyond the revenue they bring us; they are a knowledge leader in the space."

Quadrant founders Peter Ledger, who is the son of serial channel entrepreneur Neil Ledger, and Paul Risk, have agreed to stay on as part of the deal.

"We have an acquisition strategy and companies must fit into that strategy," said Greeff. "We do not acquire companies and then create a strategy around that. Quadrant is extremely complementary to what we do – they are exactly like we were eight years ago and have good technical resource in a good area of the market.

"We will probably look to do three more. We are speaking to a few at the moment and should do another one or two by our next financial year end in July."

Kay Bruen, founder of channel consultancy Clipsham IT, said: SecureData is putting its money where its mouth is. It said it would make acquisitions and it is - so good for them."