Manchester-based IT security firm NCC Group has bought Wilmslow-based competitor SDLC Solutions for up to £15m.

The firm is paying an initial £7.75m upfront, with two further cash payments totalling £7.25m being made if it hits performance targets over the next 26 months. The deal will be financed through its newly-agreed debt facility and through cashflow payments.

SDLC Solutions provides IT testing services and is owned owned by managing director David Hallam and Finance director Peter Stock. Hallam's wife, Lesley, is also a director. Its financial year completes next Friday (30th), when it expects to report earnings before interest and tax of £1.5m on sales of £12m and have £3.8m of gross assets. It employs more than 70 full-time staff - most of whom are testers - and has a network of a further 60 associates working with the firm.

NCC said the firm would continue to be managed as a standalone business within its Group Assurance division and would trade as "SDLC Solutions, a NCC Group company".

Chieff executive Rob Cotton told Crain's that it had tracked the progress of SDLC Solutions for some time.

"We were obviously aware of them because they're down the road in Wilmslow and they operate in a space we're not in with regards to testing.

"We tend to come in at the end of the cycle to ensuire that what's been done can't be broken down and they tend to work with businesses earlier in the cycle so it's a good fit," he said.

He added that the price paid for the company was a fair one.

"I always say that a a good deal is one that leaves bread on the table fore both sides. We think that's very much the case with this deal. There's a good opportunity for them to earn a lot more money and if they do we'll benefit."

He also said that it was planning to grow, not cut, employee numbers at the acquired business.

"We don't do acquisitions on the basis of cost reductions and on removing headcount. We do them on the prospects for growth."

Stuart Moss of Rickitt Mitchell advised NCC Group plc on the acquisition of SDLC.