Quadrant completes New Zealand cybersecurity roll-up
Quadrant Private Equity has invested in New Zealand-based cybersecurity providers Quantum Security Services, ZX Security, and Helix Security Services with a view to supporting expansion into new geographies and service offerings.
The transaction was completed through Quadrant’s growth strategy, which writes cheques of AUD 30m-AUD 50m for minority and control positions. The firm closed its second growth fund in 2021 with AUD 530m (AUD 359m) in commitments. It operates separately from the flagship buyout fund, the most recent of which closed on AUD 1.24bn in 2020.
Quantum, ZX, and Helix offer services spanning governance, risk and compliance, penetration testing, cloud security, and cyber strategy. They are tracking an increase in the number and complexity of cyber threats. According to New Zealand’s Computer Emergency Response Team (CERT NZ), data breaches increased nearly eightfold between 2017 and 2021.
“Partnering with ZX, Helix, and Quadrant will help accelerate talent acquisition and combine each other’s respective strengths to create a culturally aligned leading cyber security specialist group with an expanded service offering, capable of helping more customers uplift their cyber security maturity.,” said Eugene Gibney, founder of Quantum, in a statement.
Simon Pither, a managing partner at Quadrant, and Louise Haslehurst, an investment director at the firm, will join the board of the combined entity. Haslehurst hailed the three component companies as leaders in their fields, highlighting opportunities to “unlock further growth both organically and via acquisitions.”
Quadrant is not alone among Australia and New Zealand-focused investors in pursuing a roll-up strategy in the cybersecurity space. In 2019, BGH Capital scooped up 12 separate companies to form CyberCX, which was touted as Australia’s first large-scale, full-service cybersecurity player. At the time, aggregate annual revenue was more than AUD 100m and the overall headcount exceeded 400.
Quadrant’s previous exposure to the broader IT services space through the growth strategy includes Arq Group, which was acquired in early 2020 for AUD 35m and sold to SingTel Group-owned NCS Group for AUD 290m in March 2022. More recently, the private equity firm bought cloud services providers Cevo, Arinco, and D6 Consulting.
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