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MBO splits Star and MessageLabs

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Managed security services firm MessageLabs and Star Technology Services, the business-focused ISP that gave it birth, are to become separate companies via a management buyout of Star. Terms of the deal were not disclosed.

Star Technology Services will now operate independently under a management team already in place. As well as serving as chief exec of the newly separated Star, Ben White will also retain his role as chief strategy officer of MessageLabs and vice chair of the board of MessageLabs Group.

The separation of the two firms is designed to make it easier for each to expand: MessageLabs wants to continue to grow globally and add to its portfolio of net filtering and security services; Star wants to focus on providing connectivity, hosting, email, and security technologies to its target market of small businesses based in the UK.

For the year ending July 2006, MessageLabs Group reported revenue of £91.2m ($173m), up 23 per cent on 2005. Revenues were roughly split down the middle with Star bringing in £45.8m ($87m) in revenue and £49.7m ($94.4m) for MessageLabs.

MessageLabs, initially the virus-busting arm of Star, brought more bacon home than its parent for the first year last year. Its operations have enjoyed growth in excess of 35 per cent for the last five years.

"MessageLabs Group's decision to separate sister companies Star and MessageLabs will enable both companies to focus independently and more strategically on future growth," said David Morrison, chairman of MessageLabs Group. "The sale of Star should also provide additional funding for MessageLabs continued expansion beyond email security." ®

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