BAE takes flight in cyber security sector with $233m bid for SilverSky

 
Caitlin Morrison
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BAE, more used to building jets, is building on its cyber security arm
Defence firm BAE Systems is looking to expand into the cyber security sector with a $232.5m (£144.2m) bid for SilverSky.

SilverSky, owned by US company Perimeter Internetworking, is a cloud-based security services provider with 5,500 customers in the financial services, retail, healthcare, energy, critical infrastructure and manufacturing sectors.

It is focused mainly on the US market, with a developing business in Asia and Europe.

The acquisition will be made on a on a cash-free and debt-free basis, and is expected to close before the end of 2014. It will be funded from BAE Systems’ existing cash resources.

Ian King, chief executive at BAE, said the deal would help to grow the group’s Applied Intelligence commercial cyber security business and would also provide a “proven route to commercial markets in the US and other countries”.

He added: “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.”

Sash Tusa, analyst at Edison Investment Research, said that although the acquisition was a small one on a financial basis, it was interesting because BAE had not made a “significant deal” in the cyber security sector for a couple of years. He commented: “Investors have become a bit disappointed by BAE’s cyber activities, since the overall growth has been weak recently due to US budget cuts. This deal could be quite an interesting opportunity for BAE to re-boot its cyber business.”

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