I.T. firm Newmark Technology unveiled a shake-up of the business after securing a deal to snap up a rival.

The group is buying Grosvenor Technology, which designs and makes security management systems for clients such as Marks & Spencer, the Metropolitan Police and the Inland Revenue, in a deal worth up to £6.8 million.

Grosvenor was founded in 1989 by three of its directors - Derek Blethyn, Alan Burgess and Peter Brooks.

Along with fellow director Eric Dew, they will continue to run the business.

Newmark is also seeking to buy the remaining 49 per cent in former IT security firm Vema that it does not already own.

The group floated Vema, its Dutch subsidiary, on the Alternative Investment Market last year and reduced its interest to 51 per cent. Since then, its trading assets have been sold.

Newmark said it was buying back the stake as there was "little point" to Vema having a separate listing now it was a cash shell. Once both deals were complete, the group would then seek to change its name to Newmark Security.

This was necessary as the current name did not reflect its core business.

Chairman Maurice Dwek said: "We believe the proposal represents an exciting opportunity for the enlarged group and will strengthen our position in the worldwide security market.

"The proposed transactions should create a high added-value security company offering its customers electronic and physical solutions, which will deliver enhanced shareholder value."

Details of the overhaul come as Newmark posted figures for the year to April 30.

Turnover was flat at £12 million but pre-tax profits soared to £2.1 million from pre-tax losses last year of £620,000.