Capita has acquired secure networking firm Electranet UK for a sum of £37 million. The deal will provide Capita with access to a company with a proven track record in providing security sensitive networking services to some of the UK’s largest public sector clients, including the MoD, as competition for security services contracts from government departments heats up.
Electranet UK was founded in 1996 and is located in Hampshire. The company began its journey as a network cabling company, before expanding into the Internet Protocol (IP) coverage systems and networking market as technology developed. Today, the company provides end-to-end secure networking solutions in projects for some of the UKs largest and most security sensitive clients, including the MoD, HM Prison Service, Ministry of Justice – as well as to partners BT, Microsoft and HP. Electranet UK has enjoyed rapid growth in recent years, with predicted 2015 revenue of £26.4 million, up from £15.1 million in 2014.
To boost its bargaining power for future contracts in the Government cyber security space, Capita decided to acquire Electranet UK. The deal will see the consulting firm pay Electranet’s owners Palatine Private Equity £37 million, a 1.4 times premium on this year’s predicted revenue.
Through the acquisition, Capita will gain the firm’s status to sponsor its own workforce through national security vetting processes, such as Developed Vetting and the Counter-Terrorist Check, as well as to provide capabilities to its recently won £325 million network services contract in Scotland.
“The acquisition of Electranet will enable an evolution of our secure IT infrastructure capability. This business will allow Capita to build on its existing expertise and deliver highly secure services to both new and existing customers,” explains Andy Parker, Capita’s Chief Executive. “We will integrate Electranet’s skills and experience into Capita's services in a number of key sectors - driving forward organic growth and expanding our capability to build innovative new IT enabled solutions.”
Andy Richards, Chief Executive of Electranet, adds: “This acquisition marks the next natural stage of our growth as an organisation. Capita can provide access to investment and customers that will allow us to build on our great success to date. As part of Capita, our team will be able to grow and develop as we work to deliver secure and innovative systems for our customers.”