Cybersecurity Ventures: M&A Activity 1H 2015

May 28, 2015 7:44 PM ET
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Marty Chilberg is a seasoned financial professional with over 30 years of C-Suite, board, consulting and advisory experience. He began his career as a certified public accountant (CPA). He moved to Silicon Valley in 1981 to begin his career in the software industry, working for Atari, Daisy Systems, Symantec and Visio. He took Symantec and Visio through their initial public offerings as their Chief Accounting Officer and Chief Financial Officer, respectively. The past ten years have been focused on emerging macro investing themes including Cloud and Genomic Medicines.

Recent Cybersecurity M&A Activity Q2-2015

  • Singtel acquires managed security services provider Trustwave (Chicago, IL) for $810 million. Singtel, the largest telecommunications provider in Southeast Asia with over 500 million mobile customers is expected to close on the deal within 3 to 6 months.
  • Lookingglass (Arlington, VA), a cyber threat intelligence monitoring and management provider, has announced an all-cash acquisition of CloudShield, a deep packet processing (DPP) company for an undisclosed amount.
  • Cloud security provider CloudLink (Ottawa, Canada) announces they have been acquired by EMC.
  • CSC acquires Autonomic Resources (Cary, NC), a cloud computing infrastructure provider. Autonomic was the first cloud service provider to achieve compliance under FedRAMP and the first to achieve compliance with security controls outlined by DISA.
  • Defense contractor Raytheon (Waltham, MA) is investing $1.57 billion to create a new cybersecurity company with private-equity firm Vista Equity Partners LLC. The new firm will combine Raytheon Co.'s cyber products unit withWebsense Inc. (San Diego, CA), which Raytheon agreed to acquire from Vista.
  • Bain Capital acquires Blue Coat Systems (Sunnyvale, CA) from Thomas Bravo for $2.4 billion. (Thoma Bravo acquired Blue Coat Systems for $1.26 billion in 2012). Blue Coat provides online security and WAN optimization solutions.
  • The Kenjya Group (Columbia, MD) and Trusant Technologies (Columbia, MD) announces plans to merge. The combined company, The Kenjya-Trusant Group, will provide cyber protection, information technology, engineering, construction management and acquisition-support services to the IC, DoD and DHS.
  • GTT Communications (McLean, VA), a provider of cloud networking services, announces plans to acquire the managed services business of MegaPath for $152.3 million. The division provides private networking, access services and managed security services to more than 500 large clients.
  • Akamai Technologies acquires Xerocole (Boulder, CO), a DNS platform provider.
  • Vistronix acquires Agency Consulting Group (Columbia, MD), Objective Solutions (OSI) (Columbia, MD) andExaTech Solutions (Herndon, VA). Objective provides big data, cyber, collection and advanced analytics solutions to the IC. OSI deal expands Vistronix's subject matter expertise in data analytics, wireless security, communications protocol analysis, real-time secure messaging.
  • PAE acquires the Global Security and Solutions (GS&S) business unit of USIS. With approximately 1,900 employees, GS&S provides services in litigation support, biometric capture and enrollment, training, construction surveillance and security consulting. Acquisition enhances PAE's existing support to the DHS and other customers in the classified market, along with multiple long-term contracts focused on identity management, infrastructure protection, information management and mission support.
  • Ross Technologies (RTGX) acquires The Tipstone Group (Fairfax, VA), a provider of cyber research and program and portfolio management capabilities for the US DoD and IC.
  • Cisco acquires Neohapsis (Chicago, IL), a provider of application security, cloud security, compliance, IT risk and security strategy, mobile device security, and network and endpoint security services. Deal enhances Cisco's Advanced Malware Protection portfolio of security solutions and helps it improve its network security services, both on-premise and in the cloud.
  • Microsoft acquires Aorato Ltd. (Israel), a cybersecurity startup that developed a directory services application firewall. Aorato raised $10 million in VC from Accel Partners, Innovation Endeavors, Glilot Capital Partners and Mickey Boodaei.
  • ZeroFOX (Baltimore, MD), acquires Vulnr, a stealth-mode security technology company. Vulnr's technology will be integrated into ZeroFOX Enterprise, cyber security's social risk management platform, to bolster the company's product offerings

Recent Cybersecurity M&A Activity Q1-2015

  • Raytheon acquires Blackbird Technologies (Herndon, VA), a provider of persistent surveillance, secure tactical communications and cybersecurity solutions to the Intelligence Community (IC) and special operations market, for $420 million. The deal expands Raytheon's special operations capabilities in tactical intelligence, surveillance and reconnaissance, secure tactical communications and cybersecurity.
  • BAE Systems acquires SilverSky, a provider of cloud-based email and network security tools, for $232.5 million. The deal will help grow BAE's Applied Intelligence commercial cyber security business. SilverSky's products protect critical information and networks and detect cyber threats and financial crime.
  • Gemalto acquires SafeNet (Belcamp, MD), a provider of enterprise data protection technology for $890 million. SafeNet announced $337 million in revenue in FY13. The deal will bolster Gemalto's identity and access management business. SafeNet maintains a portfolio of cryptographic key management systems, authentication servers, software license management and monetization products.
  • IBM acquires Lighthouse Security Group to further build its identity and access management offering and complement its purchase of CrossIdeas. Lighthouse's cloud-based Lighthouse Gateway platform is built to deploy for a data center, cloud or a hybrid IT environment to prevent identity theft and data breaches.
  • Veritas Capital acquires BeyondTrust Software (Phoenix, AZ), a provider of account management and vulnerability management software, for $310 million.
  • AVG Technologies has acquired Location Labs (Emeryville, CA), a provider of mobile security products. The deal is valued at upwards of $220 million, including $140 million up-front and another $80 million in possible earnouts. Location Labs had raised $26 million in VC funding.
  • Cigital (Dulles, VA) acquires iViZ Security, a provider of cloud-based application security testing tools.

Disclosure: The author is long PANW.

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