Datong plc / Seven Technologies
Cavendish Corporate Finance is pleased to announce that it has successfully advised on the £7.3 million public to private sale of spyware and intelligence solutions leader Datong plc to Seven Technologies Holdings, an engineering business specialising in the manufacture of communication applications for operation in inhospitable environments.
The deal creates a £20 million annual turnover company, which will be one of the strongest independent players in the sector, with an enhanced capability to develop next-generation solutions for its increasingly global client base.
Datong has for over 30 years specialised in providing a range of covert surveillance, tracking and location systems to defence, security and law enforcement agencies worldwide and its robust family of products and systems are designed to provide reliable, uncompromising intelligence in the most challenging operational environments.
The type, size, technology, methods and intensity of both terrorist and crime organisations, their activities and arenas, are constantly shifting and posing new threats. Datong’s products and solutions help police and security agencies to gather early intelligence so that they can identify and anticipate threats and illegal activity and act to thwart them.
Headquartered in Leeds, Datong also has offices in the US and Malaysia and a range of security clients spanning over 30 countries, which the company helps ensure maintain a technology advantage over their increasingly sophisticated and determined adversaries.
Seven Technologies Holdings is the parent company of Northern Ireland-based Seven Technologies Limited (STL), which has been trading since 2005. Last year YFM Equity Partners, a specialist SME fund manager, paid £6.6 million to take a stake in Seven to help SLT’s growth and development.
Both sets of management believe that the two businesses are an excellent fit and that there is a strong commercial and cultural affinity between Datong and Seven, in terms of their strategies, products and service offerings.
Combining the two businesses creates a larger and stronger group within the specialist intelligence technology sector, which will benefit from additional scale and a wider customer base. It will also enable the enlarged company to tender for larger projects and cross-sell products from each group into the other’s markets as well as providing a stronger platform for further international expansion.
The deal was led by Cavendish partner Joe Stelzer and director John Farrugia, with support on Takeover Panel and public company matters by Cavendish partner Jonathan Buxton.
The transaction is the latest in a number of public to private transactions advised on by Cavendish, including the sale of Liberty PLC to Blue Gem Capital Partners and Focus Solutions Group plc to Standard Life plc.
John Farrugia, who led the transaction for Cavendish Corporate Finance, commented:
“Global threats from terrorist and international crime organizations are constantly changing and this deal will help the enlarged group deliver enhanced intelligence solutions for its broad range of clients to address these evolving challenges and assist it in capitalising on the opportunities these trends present. The Group’s products and systems are world-leading and are increasingly being used by defence and law enforcement agencies worldwide for their security and surveillance needs.
We made absolutely the right choice in appointing Cavendish. Michael Jewell and the team were instrumental in getting us the deal we wanted. I would have no hesitation in recommending them to anyone thinking about a sales process.
Cavendish introduced us to GE and managed the negotiation and coordinated the transaction due diligence. Their involvement was instrumental to the deal being successful.
When looking for an advisor we decided we wanted someone who had specific experience in negotiating within the Private Equity space. It requires some additional skills to those needed in a trade sale and we were lucky to have found in Cavendish, a company that was able to help us.
This marks a significant opportunity for our partners, customers and people as we become part of the global Kyocera family and continue the journey we started back in 1988. When looking for an advisor we wanted someone with an international network and experience of working with buyers both here and overseas. Cavendish had the expertise to facilitate the transaction and the support they provided was invaluable.
The Cavendish team, led by Nick Jones, did an excellent job managing the process and ensuring the smooth closing of the transaction in a timely manner. They were always professional and aligned with our shareholder goals – many thanks to the whole team.
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