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UK-based defence conglomerate Ultra Electronics has acquired security appliance firm AEP Networks in a deal valued at up to $75m. Ultra Electronics agreed to pay $57.5m plus a further $17.5m, depending on sales figures, for the remote appliance firm.

AEP Networks specialises in SSL VPN appliances that allow workers to securely connect into corporate applications and databases without the need to install client software on every PC, thus saving money. The technology works in conjunction with remote access hardware encryption products. More recently AEP also began marketing a subscriber-based thin client virtualisation service called Cloud Protect.

Most of AEP's 80 employees are based in Ascot, Berkshire and Hemel Hempstead, Hertfordshire. AEP also has a sales and engineering operation in New Jersey in the US. It claims 5,000 blue chip and government customers in over 60 countries.

Ultra Electronics's main line of business is defence and aerospace, although it has a finger in many pies, including energy and transport. AEP will join Ultra's Tactical & Sonar Systems division.

The end game for most security firms is to be bought by the likes of Symantec, Cisco or Juniper. Less frequently start-ups grow to the point where an IPO is possible.

The AEP deal shows that a greater range of businesses – including those in the defence sector – are looking to expand their cyber-security capabilities, primarily because it might allow them to gain a slice of lucrative government net security contracts. ®

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