Sale of Software Testing
NCC Group plc is today announcing the sale of its Software Testing business to QualiTest Group ('QualiTest'), a portfolio company of Marlin Equity Partners.
The Group has completed the sale of the Software Testing business to QualiTest Group for immediate cash consideration of £3.6m on a cash and debt free basis (subject to any final post-completion adjustments to working capital).
NCC Group's Strategic Review, which completed in July 2017, concluded that its Software Testing and Web Performance businesses had little strategic overlap with the Group's broader cyber security and business continuity activities and therefore would be sold. It was management's view that both businesses would benefit from operating within companies whose core activities were more closely aligned to their own. Following the sale of the Web Performance business on 28 March 2018, the sale of Software Testing therefore completes the divestment process enabling the Group to focus on its two core divisions, Assurance and Escrow.
QualiTest is the world's largest pure play software testing and quality assurance specialist. The acquisition of NCC Group's Software Testing division will significantly expand QualiTest's presence in the U.K. and the pooling of knowledge and expertise will enhance the service offering for all customers of the combined business.
At the end of April 2018, net assets attributable to the Software Testing business (which are subject to post-completion adjustments to working capital) amounted to £9.7m, which included £8.0m of goodwill from the original acquisition of Software Testing in 2009. In the eleven months to the end of April 2018, Software Testing contributed £0.7m of Adjusted EBIT(1) to the Group's performance.
Software Testing was designated as a discontinued activity in the Group's Interim results that were published on 16 January 2018, given the earlier decision to sell the business. The sale therefore has no impact on expected full year Adjusted EBIT from continuing activities and only an immaterial impact on total full year Adjusted EBIT. The cash proceeds will reduce the Group's net indebtedness.
The Group expects to report its full year results, for the year ended 31 May 2018 on Tuesday, 17 July 2018.
(1) Adjusted EBIT excludes individually significant items, share based payments, unwinding of discounts on deferred consideration and amortisation of acquired intangible assets. For Software Testing specifically, it also includes an estimate of its fair share of attributable shared central overheads.
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Adam Palser, CEO
Brian Tenner, CFO
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Neil Bennett/Al Loehnis
About NCC Group plc
Listed on the London Stock Exchange, NCC Group is a global expert in cyber security and risk mitigation, working with businesses to protect their brand, value and reputation against the ever-evolving threat landscape. With the company's knowledge, experience and global footprint, it is best placed to help businesses identify, assess, mitigate & respond to the risks they face.
Headquartered in Manchester, UK, NCC Group employs over 1,500 people globally and is a trusted advisor to more than 15,000 clients worldwide. https://www.nccgroup.trust/uk/
About QualiTest Group
QualiTest is the world's largest pure play software testing and quality assurance specialist. QualiTest designs and delivers solutions that leverage deep industry-specific understanding with cutting-edge testing technology. QualiTest offers a wide range of personalized testing solutions with years of expertise in the technology, telecom, healthcare, finance, defence, media, utilities and retail industries. With offices in the United States, the United Kingdom, Israel and India, the company serves over 500 customers worldwide.
Published date:  25 May 2018