In a major strategic shift for one of Britain's prominent cybersecurity firms, the private equity owner of supermarket giant Asda is on the verge of a significant acquisition. TDR Capital is in advanced talks to purchase the Escode software escrow division from NCC Group for approximately £275 million, Sky News has learned.
Deal Details and Competitive Process
Banking sources indicate that negotiations between TDR Capital and the London-listed NCC Group have reached a late stage. An agreement for Escode, which provides critical software escrow and verification services, could be finalised as early as this week. The deal has been in the works since last summer, when NCC first explored a sale of the unit.
TDR Capital is understood to have outbid several rival private equity firms to secure the acquisition. Other interested parties included Cap10, Platinum Equity, and Montague Private Equity, highlighting the attractiveness of the software escrow specialist in the current market.
Strategic Reshaping of NCC Group
The successful sale of Escode would mark a pivotal moment for NCC Group, fundamentally altering its business model. The transaction would effectively transform the company into a pure-play cybersecurity services business, allowing it to focus exclusively on its core security offerings.
NCC has signalled that the remaining cybersecurity unit will be repositioned towards higher-value, recurring revenue streams. Furthermore, the company has stated that if the sale proceeds, it would consider a significant return of capital to shareholders. This would be in addition to an already announced initial share buyback programme, potentially delivering substantial value to investors.
Market Context and Future Prospects
This move follows revelations last summer that NCC had also appointed advisors to explore a sale of its core cybersecurity business, indicating a period of significant corporate reflection. The potential Escode sale, however, appears to be the first major piece of this strategic puzzle to fall into place.
NCC Group, which employs roughly 2,200 people across Europe, North America, and Asia-Pacific, saw its shares close at 139.8p on Friday, giving it a market capitalisation of around £440 million. Both NCC Group and TDR Capital declined to comment on the ongoing talks.
For TDR Capital, the acquisition of Escode represents a strategic diversification beyond its retail holdings, which include a controlling stake in Asda, into the specialised and growing field of software resilience and verification services.
