British warboffinry spinoff firm QinetiQ announced today that it had acquired Boldon James, secure-messaging software providers to UK military and spook customers.
Boldon James was owned by private equity outfit Warburg Pincus from 1998 to 2005, having been acquired from its original owners. The company's established customers have long included the UK Ministry of Defence, in partnership with other firms.
The latest military units to use Boldon James products will be the new Type 45 destroyers for the Royal Navy. The company also has deals with the German, Turkish and Australian forces.
Boldon James also provides secure formal messaging to other UK government clients, probably including the domestically-focused Security Service (MI5) but perhaps not the more overseas-oriented Secret Intelligence Service (MI6). The company brands its products as suitable for "Homeland Security" and specifies that it has Home Office contracts but not Foreign Office, which would tend to support this assessment - as would QinetiQ's release today, specifying "military, government and security customers".
In 2005, with Warburg Pincus looking for an exit, there was a £5.5m management buyout using backing provided by equity outfit ISIS, and a big sales and marketing push followed.
The glamour of the spooks may have been a useful selling point. During 2006 Boldon James was named as Microsoft's Global "Go To Market Partner" for Defence Messaging, and the company landed a deal in partnership with US defence giant Lockheed to supply military message handling software to the American armed forces. The deal is said by Boldon James to be worth a little more than £10m over 10 years.
Now ISIS have sold their interest to QinetiQ, which was itself formed by the UK Ministry of Defence selling off most of its former Defence Evaluation & Research Agency. Qinetiq have paid £15.7m up front, and up to £4.3m will follow if targets are met. The money goes to "ISIS Equity Partners, the management team and other staff who hold shares following the exercise of options".
ISIS claim to have more than tripled their money, though the exact divvy between the former shoreholders hasn't been revealed.
According to the ISIS release, Martin Sugden, CEO at Boldon James, commented: "ISIS understood the market in which we operated in." Though we're guessing he didn't actually say that.
Sugden went on to add: "We are delighted to be joining QinetiQ. They provide a superb channel to market and complementary expertise, enabling Boldon James to leverage our already strong market position."
Boldon James employs 68 people - "a number of whom have extensive intelligence and military backgrounds" - and has offices in Crewe and Maidenhead. ®