Livingbridge preps Adarma for 2023 sale process

Joao Grando , Dominic Pasteiner and Charlie Taylor-Kroll
05 December 2022

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UK-based private equity firm Livingbridge has appointed DC Advisory to explore a sale of cyber security services provider Adarma, two sources familiar with the situation and two sector bankers said.

A sale process is still in a preparatory phase and is expected to be launched next year, although no firm decision on timing has been made, said one of the sources. The Edinburgh-based company, which provides IT security consulting solutions, generates GBP 40m-GBP 50m in annual turnover, one of the sources and one of the sector bankers added.

Formerly known as ECS Security, Adarma booked more than GBP 43.1m in annual revenues last year, up from GBP 42.1m in 2020, according to Company House filings. It generated GBP 1.6m in EBITDA in 2021, versus GBP 5.7m in 2020 as its decision to invest in its employees, sales, marketing and development reduced its profitability in the period, according to the filings.

Livingbridge supported a management buyout of Adarma, which was born out of the cyber-security arm of UK-based digital transformation consultancy ECS, in 2019. The Bank of Scotland provided debt to support the deal. The sponsor owns a majority stake but less than 75% of the business, according to company filings.

Adarma provides threat management services and helps large enterprises establish operational security capabilities including in-house, co-managed and fully managed Security Operations Centre (SOC) environments, according to the Livingbridge website.

The company also helps clients extend existing SOC capabilities to respond to threats and establish a proactive approach to hunting and effectively defending against attackers through addressing control gaps. It has offices in Edinburgh and London and more than 300 employees.

The European cybersecurity space has continued to see robust deal activity in 2H22 with several deals announced in recent months. These include the tie-up of Trill Impact-backed Allurity with Spain-based Aiuken Cybersecurity, Apax Partners' acquisition of France-based Mailinblack and Noventiq's purchase of Serbian software provider Saga Group.

Representatives for Livingbridge and DC Advisory declined to comment. Adarma did not respond to requests for comment.