BAE to buy US commercial cyber security provider
Defence group BAE Systems is buying US group Perimeter Internetworking Corp. for $232.5m as part of its plan to expand its Applied Intelligence commercial cyber security business.
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The acquisition, which is being made on a cash-free and debt-free basis, will be funded from BAE Systems's existing cash resources.
Perimeter, which trades as SilverSky, a commercial cyber service provider, has a customer base of around 5,500 in the financial services, retail, healthcare, energy, critical infrastructure and manufacturing sectors.
It is expected to generate sales in the region of $75m for the 2014 calendar year.
The proposed acquisition is expected to improve earnings in the third year after the deal closes, which is set to be by the end of 2014. Post-tax returns are expected to exceed BAE Systems' cost of capital in the fourth year.
The business is largely focused on the US market with a developing business in Asia and Europe. It currently employs around 400 people and is headquartered in the Greater New York area.
BAE chief executive Ian King said: "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."
He also said the enlarged business would have "outstanding growth opportunities".
Shares in BAE declined 0.32% to 439.40p by 08:42.