Web Page sponsored by Odyssey Corporate Finance
Contact: Tom McCarthy, Director, Odyssey Corporate Finance
M: 07867 459 600
D: 0121 503 2375
25 Nov 15. Cyber Warfare Specialists NSO Group Explore $1bn Sale. NSO Group Ltd, a company that helps governments spy on mobile phones and is so secretive that it regularly changes its name, is exploring a sale that could value it at close to $1bn, including debt, according to people familiar with the matter. The move comes as governments around the world, including the United States and China, increase spending on cyber security and warfare, boosting the valuation of technology companies that are active in the sector. NSO’s owner, private equity firm Francisco Partners Management LLC, has held talks with investment banks in recent days to appoint a financial advisor that will run a sale process for the company, the people said this week. NSO has annual earnings before interest, tax, depreciation and amortization of around $75m, the people added. The sources asked not to be identified because the deliberations are confidential. NSO did not respond to a request for comment, while Francisco Partners declined to comment. Founded in Israel five years ago by entrepreneurs Omri Lavie and Shalev Hulio, NSO makes software that secretly targets a user’s mobile phone and gathers information, including text messages, photos and Internet browning data. Francisco Partners acquired a majority stake in NSO in a $120m deal last year. The company has since changed its name several times, most recently calling itself “Q.”
Worldwide spending on information security technology is expected to grow from about $77bn this year to $108bn in 2019, thanks to demand from banks, retailers, government agencies and hospitals, according to research firm Gartner. (Source: Cyber Security Intelligence/Ein News)
25 Nov 15. Defence contractor Chemring Group said trading expectations for the full year remain in line with guidance it provided in October.
Revenue in the final quarter of 2015 was approximately £124m, resulting in revenue for the year to 31 October of approximately £377m compared with £403.1m in 2014, the group said. Late last month, Chemring warned there was a “realistic prospect” that its underlying operating profit for 12 months to the end of October could fall by approximately £16m – £33m on the back of a revenue delay related to a contract it signed in the Middle East. In a trading update on Wednesday, it confirmed that no revenue or cash advance payment in respect of the 40mm ammunition contract to the Middle East, referred to in the October profit warning was recognised in the 2015 full year results. However, the London-listed company said the export approvals associated with this contract have now been granted and revenues are expected to commence once the cash advance payment has been received. Meanwhile, the group said its order book at 31 October 2015 was approximately £570m compared with £486.8m 12 months ago, while net debt stood at approximately £154m from £135.6m in 2014, just below the lower end of the range of £155-£165m set out in the October trading update.
Separately, Chemring said it has reached an agreement with Esterline Corporation to buy patents, equipment, stock and selected contracts relating to its UK-based subsidiary, Wallop Defence Systems, for an initial cash consideration of £2.5m.
Additional payments of up to £9m, conditional on the future receipt of specific orders, may be made over the next three years, the company added, indicating the assets to be purchased relate to air countermeasures and pyrotechnic products that will be manufactured at Chemring’s existing UK operations.
The transaction, which is subject to approval by the UK Ministry of Defence, and the UK Competition and Markets Authority, is expected to be finalised in early 2016. Chemring shares