Bytes Technology Group (LSE:BYIT) has acquired CyberOne, a UK cyber security services provider, for an initial £19.4m funded entirely from existing cash resources.
The London-listed software, security, AI and cloud services specialist said the deal strengthens its capabilities across the cyber security lifecycle, adding CyberOne's AI-enabled managed security services, security operations and cyber resilience consulting to its offering.
Further contingent cash payments are due over the next 16 months depending on performance, though Bytes did not disclose a cap on the total consideration.
CyberOne, founded in 2005 and headquartered in London with more than 80 staff across the UK and the Philippines, holds Microsoft Security Elite Partner status and belongs to the Microsoft Intelligent Security Association. The business generated revenue of £9.5m in the 12 months to 31 July, with high double-digit growth and expanding gross profit margins, operating in a UK cyber security services market Bytes expects to reach around £5.2bn by 2029.
Bytes said the acquisition is a targeted investment consistent with its capital allocation framework and is expected to be earnings-enhancing in its first full financial year of ownership, with CyberOne's leadership team joining the group and initially running the business as a standalone unit alongside Bytes' sales teams.
"CyberOne is a strong strategic fit for BTG, enhancing our capabilities in a rapidly growing technology segment and supporting growing customer demand for cyber security services," said chief executive Sam Mudd, adding that the deal combines "a proven managed security platform and a growing base of high-margin recurring revenue with BTG's existing scale and customer reach".
The acquisition follows a half-year trading update last month in which Bytes raised full-year guidance after trading ran ahead of expectations for the six months to 31 August, with gross invoiced income up around 19% and gross profit up about 18% year-on-year, leaving the group with net cash of around £68m at that half-year mark.
Completion of the CyberOne deal is subject to clearance under the UK's National Security and Investment Act 2021, which Bytes expects to receive shortly.