06 Apr Cybersecurity M&A Report, Vol. 1, No. 3: Brisk Activity In The Third Quarter Of 2017
Menlo Park, Calif. – Oct. 3, 2017
More than 50 cybersecurity acquisition and merger agreements were cut during the third quarter of 2017 topped by the completion of two mega deals by Northrop Grumman and HPE.
Northrop, whose cybersecurity businesses are worth an estimated $2 billion, wrapped up its buy of Orbital ATK for $9.2 billion. Of that amount, $7.8 billion was cash and $1.4 billion was assumed debt.
Meanwhile, Micro Focus acquired HPE’s software business for $8.8 billion. The pairing created one of the largest pure play software companies in the world.
Those two deals alone exceeded all activity in 2016 which, according to Hampleton Partners, was $13.4 billion.
Hampleton noted that cybersecurity M&A activity dropped precipitously after 2010, when it reached $14 billion, but has been steadily climbing since then.
Rising along with the number of deals cut has been company valuations, from 2.3 times sales in 2013 to 5.5 times sales in 2017.
Also during the period, Symantec unloaded its website security and PKI business to DigiCert for $950 million. Symantec was a buyer, too, acquiring two Israeli companies — Skycure, a mobile threat defense firm, and Fireglass, an enterprise cybersecurity provider.
SAP was a buyer, too, scooping up Gigya, a maker of a web-based platform for customer identity management and profiling, for a reported $350 million.
Two companies hammered out acquisitions exceeding $200 million. H.I.G. Capital bought all the common shares of NCI and took that provider of enterprise software and services private for $283 million. Open Text announced a definitive agreement to acquire Guidance Software for $222 million.
There were also a brace of deals breaking the $100 million mark. Mantech International bought InfoZen for $180 million, and ZTE, a Chinese telecommunications company grabbed Turkish systems integrator and military contractor Netas for $101.3 million.
September
Sep. 28. Tracker Capital Management acquires root9B, a provider of cybersecurity solutions and services. Financial terms of the acquisition were undisclosed.
Sep. 27. SAP acquires Gigya, maker of a web-based platform for customer identity management and profiling, for a reported $350 million.
Sep. 22. Accounting firms JPMS Cox of Arkansas and HoganTaylor of Oklahoma announce merger. JPMS Cox notes HoganTaylor will add specialized services like cybersecurity to its portfolio.
Sep. 19. Mantech International announces intent to acquire InfoZen for $180 million in cash. InfoZen is an IT solutions provider whose domain expertise includes threat monitoring and assessment capabilities in support of critical national and homeland security missions.
Sep. 19. Ann Arbor Networks and Bluetrain Computers, two network security companies, announce merger into new company, A2 CyberSecurity.
Sep. 19. Swedish maker of door opener solutions Assa Abloy signs agreement to acquire Mercury Security, a Long Beach, Calif. maker of controllers for physical access control . Financial terms of the acquisition were undisclosed.
Sep. 18. Northrop Grumman, a defense contractor, announces completion of acquisition of Orbital ATK for $9.2 billion — $7.8 billion in cash and $1.4 billion in debt assumption. Orbital’s products include rocket motors, missiles and electro-optical countermeasure hardware.
Sep. 13. 10Pearls acquires ProQual-IT, an information technology services provider specializing in biometrics and identity management. Financial terms of the acquisition were undisclosed.
Sep. 13. Silent Circle, a maker of enterprise-class mobile security, privacy and compliance software, acquires Kesala, a provider of solutions for securing data across platforms. Financial terms of the acquisition were undisclosed.
Sep. 12. Avi Networks acquires StacksWare, which offers software-as-a-service elastic load balancing, application analytics and web application firewalls. Financial terms of the acquisition were undisclosed.
Sep. 11. Rackspace announces plans to purchase Datapipe, which offers services for infrastructure management, cloud migration and cybersecurity project management. Financial terms of the acquisition were undisclosed, but it has been reported that the deal is the biggest in Rackspace’s history.
Sep. 11. Falanx Group acquires AuditSec Services, which provides cybersecurity guidance to some of the world’s largest petrochemical, pharmaceutical and industrial companies. Financial terms of the acquisition were undisclosed.
Sep. 11. Media rating company Nielsen acknowledges it has acquired some technology assets and key personnel from Sentrant Solutions, maker of solutions to combat fraudulent online advertising. Financial terms of the acquisition were undisclosed.
Sep. 8. Polemos announces agreement to acquire cybersecurity company SecurLinx Corp. by issuing stock worth £17.8 million. In addition, Polemos will also advance a loan of $500,000 to SecurLinx, of which $300,000 is due when the acquisition is completed and the remainder 21 days later.
Sep. 5. Sunayu acquires Fractal Technology, a mobile security company. Financial terms of the acquisition were undisclosed.
Sep. 1. HPE completes sale of its IT management, big data and security lines to Micro Focus for $8.8 billion.
August
Aug. 31. Juniper Networks announces intent to acquire Cyphort, a security analytics company. Financial terms of the acquisition were undisclosed.
Aug. 31. Jacob Engineering Group announces acquisition of Blue Canopy, a data analytics, cybersecurity and application development firm. Financial terms of the acquisition were undisclosed.
Aug. 28. Trumpf International acquires C-Labs Corp. for a reported $10 million. C-Labs makes software that provides a secure way for IoT devices to share information outside the factory floor.
Aug. 28. Inside Secure, a mobile and IoT cybersecurity company, completes acquisition of Meontrust, maker of a flexible authentication, identification and authorization technology. The deal is an all-cash transaction worth an estimated €5 million and includes an earn-out payable in 2019 and 2020, depending on the meeting of certain business targets.
Aug. 28. Forcepoint, a cybersecurity company created by Raytheon through Websense, acquires RedOwl, a security analytics firm. Financial terms of the acquisition were undisclosed.
Aug. 22. Big Four accounting and professional services firm EY acquires Australian cybersecurity firm Open Windows Identity. EY states acquisition will be the central platform for a new identity management advisory services offering aimed at the Asia-Pacific region. Financial terms of the acquisition were undisclosed.
Aug. 16, Data Systems Analysts acquires Project Performance Company, a solutions provider specializing in enterprise systems development and integration, knowledge management, cybersecurity, energy management and environmental sustainability. Financial terms of the acquisition were undisclosed. PPC will be DSA business unit supporting programs at U.S. Department of Justice, National Archives and Records Administration, Environment Protection Agency and the Commonwealth of Virginia.
Aug. 16. StorTech acquires South African cybersecurity consultancy GRCBizassurance. StorTech states GRC team will be absorbed into its cybersecurity division, which will be led by former GRC CEO Caesar Tonkin. Financial terms of the acquisition were undisclosed.
Aug. 15. H.I.G. Capital announces completion of acquisition of all outstanding common stock of NCI, a provider of enterprise software and services, including cybersecurity and information assurance solutions, to U.S. defense, intelligence, health and civilian government agencies. Transaction, which allows H.I.G. to make NCI a private company, is valued at $283 million.
Aug. 15. Fidelus Technologies announces acquisition of networking and security services group of Something Digital. Financial terms of the acquisition were undisclosed.
Aug. 15. Webroot, an endpoint security company, acquires Securecast, a security awareness training platform. Financial terms of the acquisition were undisclosed.
Aug. 12. Cameo Resources Corp. signs letter of intent to acquire all outstanding shares of Pinot Trading, a telecom hardware provider and developer of applications and platforms for the support of crypto currencies. Financial terms of the acquisition were undisclosed.
Aug. 11. Accenture completes acquisition announced in June of Phase One Consulting Group, which delivers secure cloud solutions to U.S. cabinet departments and agencies. Financial terms of the acquisition were undisclosed.
Aug. 3. Chinese telecommunications company ZTE announces completion of acquisition of a majority stake in the Turkish systems integrator Netas. ZTE says it will help expand the Turkish company’s products, including its cybersecurity solutions, to a greater number of international markets. When announced in December, deal was valued at $101.3 million.
Aug. 2. Symantec sells its website security and PKI solutions business to DigiCert for some $950 million in cash and 30 percent of DigiCert’s common stock at the close of the transaction, which is expected in the third quarter of fiscal 2018.
Aug. 1. Zeneth Technology Partners announces merger with PierceMatrix, a software company that helps organizations identify and remove threats in near real time through the use of global and artificial intelligence. PierceMatrix will be added to Zeneth’s new commercial security service, ZenOpz, aimed at small and mid-sized businesses.
July
Jul. 31. Trillium announces acquisition of CanBusHack, one of the oldest automotive cybersecurity consulting and penetration testing companies in the world. Financial terms of the acquisition were undisclosed.
Jul. 30. Irish tech investment firm The Lucey Fund acquires PixAlert, a data risk discovery company, for €2.4 million.
Jul. 28. Altran acquires Information Risk Management, a cybersecurity consultancy based in the United Kingdom. Financial terms of the acquisition were undisclosed.
Jul. 27. Open Text announces definitive agreement to acquire Guidance Software for about $222 million. Guidance is known for its EnCase digital investigations software. Its software partners include Box, Cisco, Dropbox and Intel.
Jul. 27. One Equity Partners, a private equity firm, acquires Lutech, an Italian system integrator with software products for finance, healthcare, IoT and cybersecurity. Financial terms of the acquisition were undisclosed.
Jul. 27. Japanese investment bank Daiwa Securities Group acquires Signal Hill, a Maryland advisory firm. Signal Hill will be combined with Sagent Adisors in New York City to form DCS Advisory, which will be an affiliate of Daiwa. About 85 percent of Signal Hill’s business is in advising on mergers and acquisitions in cybersecurity, healthcare information technology, financial technology, mobility software and education. Financial terms of the acquisition were undisclosed.
Jul. 26. Shearwater Group acquires Newable Consulting, a provider of risk, governance and cybersecurity assurance services, for £600,000, with the potential for another £100,000, depending on company performance. Newable is currently the preferred supplier of General Data Protection Regulation (GDPR) advice through the London Digital Security Centre, a joint venture launched by the Mayor of London, with the Metropolitan Police and the City of London Police.
Jul. 24. Application security testing company Checkmarx acquires Codebashing, an app security education firm. No financial details were disclosed, but it was reported the deal was for between five and 10 million dollars.
Jul. 21. Bloomberg reports Snap, maker of the popular Snapchat social app, has hired the entire staff of Strong.Codes, producer of software tools designed to obscure software code to prevent piracy. The new hires will continue working in Switzerland where Strong.Codes was located before it was closed down.
Jul. 19. Avast acquires Piriform, maker of CCleaner, a popular system cleaning program for desktop computers and mobile phones. Financial terms of the acquisition were undisclosed.
Jul. 18. Subsystem Technologies acquires KMS Solutions, a provider of systems engineering and technical assistance services to the U.S. Defense Department and intelligence community. Financial terms of the acquisition were undisclosed.
Jul. 18. Rapid7 acquires Komand, a maker of software tools for automating security tasks. Deal price is reported at $50 million, including cash, stock and earn-outs.
Jul. 17. Mastercard announces agreement to acquire Brighterion, an artificial intelligence software company. It notes Brighterion’s Smart Agent technology will be added to Mastercard’s existing suite of security products already using AI. Financial terms of the acquisition were undisclosed.
Jul. 13. Cisco acquires Observable Networks, a St. Louis provider of real-time network behavior monitoring. Financial terms of the acquisition were undisclosed. During Observable’s last round of funding in 2016, the company was valued at $16 million.
Jul. 11. Symantec announces agreement to acquire Skycure, an Israeli mobile threat defense company. Financial terms of the acquisition were undisclosed.
Jul. 11. Nuvias acquires DCB, a Belgium-based value added distributor for companies such as Kaspersky Lab, WatchGuard, Trustwave and Centrify. Financial terms of the acquisition were undisclosed.
Jul. 11. HyTrust acquires DataGravity, a secure storage company. Financial terms of the acquisition were undisclosed. HyTrust recently raise $36 million in Series E round of funding. It says some of that money will be used for the DataGravity acquisition.
Jul. 7. StarHub announces it will acquire remaining 49 percent of stock in Accel Systems & Technologies in a deal with an aggregate cash consideration of $18.9 million. Accel is a cybersecurity consultancy and service provider located in Singapore.
Jul. 6. Symantec announces plans to acquire Fireglass, an Israeli enterprise cybersecurity company. Financial terms of the acquisition were undisclosed.
Jul. 6. Data Systems Analysts acquires Project Performance Company, which provides government IT services for enterprise systems development and integration, information and knowledge management, cybersecurity, information assurance, energy management and environmental sustainability. Financial terms of the acquisition were undisclosed.
Jul. 5. National Technologies Associates acquires V1 Analytical Solutions, a provider of intelligence and information solutions to U.S. government. Financial terms of the acquisition were undisclosed.
Jul. 5. Ivanti acquires RES Software, a secure, automated workspace and identity provisioning company. Financial terms of the acquisition were undisclosed.
Jul. 4. Big Wind Capital signs letter of intent to acquire some interests and assets of Hill Top Security, maker of a cybersecurity platform for small-to-medium size businesses.
Jul. 4. ABB agrees to acquire mission-critical communication business of Keymile Group, which offers services aimed at meeting demands of network operators for reliability, availability and cybersecurity. Both parties agreed not to disclose the value of the deal.
John P. Mello, Jr. is a freelance writer specializing in business and technology subjects, including consumer electronics, business computing and cyber security.
