Private Equity Firm TDR Capital to Acquire Escode

Introduction to the Deal

The private equity firm, which owns a majority stake in Asda, is completing a £275m deal to buy a division of listed cybersecurity firm NCC Group. TDR Capital is in late-stage talks to buy Escode, which has been the subject of takeover talks since last summer.

Details of the Acquisition

Bank sources said a deal between TDR and NCC for Escode, which specializes in software escrow and verification services, could be completed early this week. TDR is said to have beaten off competition from a number of rival suitors, and other buyout firms that have shown interest in Escode reportedly included several other firms.

Impact on NCC Group

If completed, NCC would be left as a pure-play cybersecurity services company and the remaining entity would be repositioned toward higher-value, recurring revenue streams. NCC has stated that if Escode were to be sold, it would consider a significant return of capital to shareholders, beyond a previously announced initial share repurchase program.

Background on NCC Group

NCC employs around 2,200 people in Europe, North America and the Asia-Pacific region. Shares closed at 139.8p on Friday, giving it a market capitalization of around £440m. The company had also explored a sale of its cybersecurity business last summer.

Conclusion

NCC and TDR declined to comment on the deal. The acquisition is expected to be completed soon, with TDR Capital emerging as the successful bidder for Escode.