Ashburn, Virginia-based MCI will pay the cash sum for Herndon, Virginia-based NetSec, which provides managed security services including network and software testing, security assessments, auditing, network monitoring, and threat and incident reporting, across 40 different vendor products. The company has established strong links with the US federal government sector, having signed deals with nine federal departments including the Department of Treasury, Justice, Agriculture, FAA, and Homeland Security. It also has commercial sector deals with companies including BP, Toyota, Standard Chartered Bank, and Time Warner.
NetSec employs a total of 150 staff, operates two security operation centers in the US, and has an operation in the UK, which employs 19 people. The company gained its presence in the UK market in June 2003 through the acquisition of Defcom Information Security Ltd, which had gone into receivership. The deal gave NetSec an additional 30 clients in the energy, financial services, and IT services sectors.
NetSec works closely with a number of IT services providers such as EDS Corp in US government contracts. It competes against managed security services providers such as Symantec, VeriSign, Internet Security Systems, and CyberTrust in the US, as well as companies such as Vistorm, BT, and Equant in Europe.
The MSSP market has gone through rapid consolidation over the past 12 months. Europe’s largest provider Ubizen was acquired by US provider Betrusted Inc in May 2004, which then merged with TrustSecure to form a new company called CyberTrust in November 2004. CyberTrust now claims to be the largest privately held provider of security services with 1,000 employees, 4,000 clients, and $160 million in revenue.
MCI, meanwhile, re-emerged from Chapter 11 in April 2004, almost two years after its collapse into bankruptcy in the wake of a $9 billion accounting scandal. It began trading once again on Nasdaq in July 2004.
