Detica soars after talk of takeover

Jul 22 2008 by Peter McCusker, The Journal

A TECHNOLOGY firm involved in the UK’s roll-out of intelligence-led border security is at the centre of £450m bid speculation.

Detica, which builds intelligence and analytical systems for commercial and government bodies, saw its share price rise by as much as a third after it said it had received a takeover approach from an unnamed party.

The Financial Times said at the weekend that BAE Systems had made an informal offer, although it is thought Italy’s Finmeccanica and US groups Lockheed Martin and Northrop Grumman may also be interested. Detica, which launched in 1971 and listed on the stock market in 2002, is headquartered in Guildford with UK offices in London and Cheltenham. It employs 1,500 people, with staff also in Amsterdam, Geneva and the United States.

The company generates around two-thirds of its revenues from national security, with the rest coming from telecoms and financial services.

The value of Detica to potential bidders increased after it was included in the Trusted Borders consortium of companies led by Raytheon Systems. The group recently secured the contract for the next phase of the Government’s e-borders programme, which will provide security forces with pre-screening tools to check people entering the UK.

Detica, which is responsible for intelligence and analytical services in the programme, said in February the additional contract was worth £25m.

Investec Securities analyst Gareth Evans said: “Given the potential slowdown in growth in traditional defence spending, the information battlefield is becoming a key focus for growth.”