BAE Systems to acquire SilverSky to enhance commercial cyber growth strategy
BAE Systems announces it has entered into a definitive agreement to acquire Perimeter Internetworking Corp., which trades as SilverSky, a commercial cyber service provider, for $232.5 million (approximately £144.4 million) on a cash free and debt free basis.
Ian King, Chief Executive, BAE Systems, said: "The acquisition of SilverSky enhances our strategy to grow BAE Systems' Applied Intelligence commercial cyber security business. SilverSky has an established sales force, a complementary suite of scalable products and a large installed customer base, providing a proven route to commercial markets in the US and other countries for our combined capabilities.
"SilverSky's cloud-based email and network security solutions, its highly skilled resource in marketing and engineering, plus an experienced management team are an ideal fit for Applied Intelligence. Together, the enlarged business will offer corporate clients a suite of products and services to protect critical information and networks and detect cyber threats and financial crime. The enlarged business has outstanding growth opportunities."
SilverSky is a leading independent cloud-based managed security services provider operating in the fast-growing cyber security market providing services including email protection, network security and managed applications. Its customer base includes approximately 5,500 customers in the financial services, retail, healthcare, energy, critical infrastructure and manufacturing sectors.
SilverSky is largely focussed on the US market with a developing business in Asia and Europe. The business currently employs around 400 people with its headquarters in the Greater New York Area and principal operations in the US and the Philippines. SilverSky is expected to generate sales for the 12 months ended 31 December 2014 of approximately $75 million (£46.6 million1).
The proposed acquisition is expected to be accretive to earnings in the third year following closing with post tax returns expected to exceed BAE Systems' cost of capital in the fourth year following closing.
The acquisition will be funded from BAE Systems' existing cash resources. The transaction is conditional upon receiving certain regulatory approvals and is expected to close before the end of 2014.