Datong plc / Seven Technologies

Cavendish Corporate Finance is pleased to announce that it has successfully advised on the £7.3 million public to private sale of spyware and intelligence solutions leader Datong plc to Seven Technologies Holdings, an engineering business specialising in the manufacture of communication applications for operation in inhospitable environments.

The deal creates a £20 million annual turnover company, which will be one of the strongest independent players in the sector, with an enhanced capability to develop next-generation solutions for its increasingly global client base.

Datong has for over 30 years specialised in providing a range of covert surveillance, tracking and location systems to defence, security and law enforcement agencies worldwide and its robust family of products and systems are designed to provide reliable, uncompromising intelligence in the most challenging operational environments.

The type, size, technology, methods and intensity of both terrorist and crime organisations, their activities and arenas, are constantly shifting and posing new threats. Datong’s products and solutions help police and security agencies to gather early intelligence so that they can identify and anticipate threats and illegal activity and act to thwart them.

Headquartered in Leeds, Datong also has offices in the US and Malaysia and a range of security clients spanning over 30 countries, which the company helps ensure maintain a technology advantage over their increasingly sophisticated and determined adversaries.

Seven Technologies Holdings is the parent company of Northern Ireland-based Seven Technologies Limited (STL), which has been trading since 2005. Last year YFM Equity Partners, a specialist SME fund manager, paid £6.6 million to take a stake in Seven to help SLT’s growth and development.

Both sets of management believe that the two businesses are an excellent fit and that there is a strong commercial and cultural affinity between Datong and Seven, in terms of their strategies, products and service offerings.

Combining the two businesses creates a larger and stronger group within the specialist intelligence technology sector, which will benefit from additional scale and a wider customer base. It will also enable the enlarged company to tender for larger projects and cross-sell products from each group into the other’s markets as well as providing a stronger platform for further international expansion.

The deal was led by Cavendish partner Joe Stelzer and director John Farrugia, with support on Takeover Panel and public company matters by Cavendish partner Jonathan Buxton.

The transaction is the latest in a number of public to private transactions advised on by Cavendish, including the sale of Liberty PLC to Blue Gem Capital Partners and Focus Solutions Group plc to Standard Life plc.

John Farrugia, who led the transaction for Cavendish Corporate Finance, commented:

“Global threats from terrorist and international crime organizations are constantly changing and this deal will help the enlarged group deliver enhanced intelligence solutions for its broad range of clients to address these evolving challenges and assist it in capitalising on the opportunities these trends present. The Group’s products and systems are world-leading and are increasingly being used by defence and law enforcement agencies worldwide for their security and surveillance needs.

“The Arculus founders have very much enjoyed working closely with the Cavendish team throughout this process. Their understanding of the technology services and cyber security sector enabled us to showcase our business in the best possible light. Their insightful guidance was a constant and we were highly impressed with the team’s capabilities and commitment which were instrumental in delivering the outcome we wanted.”

Austin France, Co-Founder at Arculus

“We are thrilled to join Motorola Solutions and build upon their industry-leading portfolio and continue to support our customers in the most challenging of environments. I would like to express our gratitude to Anthony and the team at Cavendish who provided invaluable counsel and a streamlined process throughout.”

Paul Elsey, Managing Director at Silent Sentinel

“In July 2015 we founded Pure Cremation and have grown the business to become the largest independent provider of prepaid plans in the UK. Pure is only part way through its exciting journey and, after a rigorous search process, we are delighted to have found such a strong partner in Epiris.

The Cavendish team, led by Jonathan Buxton and Ben Goldring, did a fantastic job, running a truly competitive process and managing the transaction with great skill. They were crucial in delivering this deal and its successful outcome – many thanks to the whole team.”

Bryan Powell and Catherine Powell, Co-Founders of Pure Cremation

Time is the most valuable commodity of any entrepreneur, and Zuleika and the team at finnCap have been exceptional in helping us secure today’s investment whilst enabling us to also focus time and effort on growing the business. This marks the latest milestone on our journey but it’s by no means our final destination, we are here to help people fall in love with taking the train again, and enable operators to run more profitable networks full of happier, less stressed passengers – it’s long overdue .”

Iain Griffin, Co-founder and CEO of Seatfrog

“We are absolutely delighted with the outcome of this deal and are excited to be joining DNV. This strategic decision will enable us to further accelerate our long-term growth objectives and showcase our unique LUNA technology. Karri and Harry have achieved an outstanding result for us through their wealth of sector expertise and highly commercial advice and it has been a joy working with them.”

Barry Mulholland, Founding Partner at MBI

“We engaged with finnCap Cavendish over 18 months ago to help us prepare for sale. The team’s sector specialist advice and guidance, combined with astute management of every aspect of the transaction process, delivered an exceptional deal that has surpassed all expectation, our shareholders are delighted”.

Rupert Emson, Co-founder-CEO, Vero Screening

“We’re excited to join Dialogue and to bring our digital well-being and market-leading health engagement together with their diagnosis and treatment capabilities.

I’d also like to thank to the finnCap Cavendish team for being an exceptional partner during this process. Mike and the team provided us with excellent advice and guidance throughout, working tirelessly to ensure the best outcome possible was delivered. As a founder, I couldn’t recommend them highly enough.”

Martin Blinder, co-founder & CEO, TicTrac

“This is an important milestone for our business, allowing us to focus on developing our mobile payments solutions. We believe Boku Identity will be able to continue to develop under Twilio’s ownership and we wish the business and its staff well for the future. We were impressed with the resilience and creativity of the team at finnCap Cavendish and are grateful to them for advising on the deal.”

Jon Prideaux, CEO, Boku

“This is transformational for Mail Manager. We are really excited to be joining the Ideagen family where we’re confident we’ll go from strength to strength. Good advisors are essential. Ours were great! Thank you to Anthony Platt and his team for their rock-solid guidance, support and advice.”

Stuart Rowe, CEO, MailManager

“Given the financial strength of iomart, lender appetite levels in participating in the debt facility were high. However, this was the first time that a bank club was established and our incumbent lender was potentially being replaced. Therefore, we needed support in ensuring we ran a diligent and professional process and this is exactly what the finnCap Debt Advisory team delivered. I was delighted with the outcome in terms of the new lenders and banking arrangements, which underpins our growth plans for the business.”

Scott Cunningham, CFO, iomart Group plc