Cybersecurity M&A Continues to Set Records

Cybersecurity M&A Continues to Set Records


An increase in ransomware and malicious cyber activity has led to an unprecedented increase in merger and acquisition activity in cybersecurity products and services. In the first quarter of this year alone, more than 100 mergers and acquisitions transactions were carried out.

What is driving this volume and who are the current buyers?

“Cybersecurity space buyers typically take one of three ways: strategic buyers, PE-backed strategic buyers, and PE buyers,” he said. Eric Bellmanaging director with Progress partners. “During the first half of 2022, we tracked a total of 226 transactions in mergers and acquisitions of cybersecurity. According to the count of agreements, 124 (55%) were strategic buyers, 83 (37%) were strategic buyers supported by PE and 19 (8%) were LBO (i.e., PE buyers).

The industry sees bids range in size from smaller bids below $ 5 million to Broadcompurchase of $ 69.2 billion VMWare. Other highlights in this year’s space include Tomás Bravothe $ 6.9 billion acquisition Sailing point, KKR$ 4 billion purchase Barracuda Networks i Equity Viewthe $ 17.1 billion deal Citrix.

Private equity firms that invest in cybersecurity are big players like Thoma Bravo, TA associatesVista Equity, The Carlyle group and KKR who are sitting in “massive dry dust war chests,” Bell says. These companies are attracted to the cybersecurity sector in part because of the dynamics that is the industry.

“Technology is constantly evolving as malicious actors and nation-sponsored organizations try to exploit vulnerabilities in computer systems and critical infrastructure,” Bell says. “As a result, new market opportunities arise and buyers are willing to pay to acquire capabilities that accelerate their product’s roadmap, give them access to new markets, or help them capitalize on emerging trends.”

The cybersecurity landscape is fragmented and Progress Partners points to six areas that expect to see continued interest from agreement makers:

  1. Threat intelligence and attack management
  2. Identity and Access Management
  3. DevSecOps
  4. Extended detection and response
  5. Cloud security
  6. Operational technology security and Internet of Things security

Cybersecurity transactions show no signs of slowing down. Bell hopes to “see continued activity from leading technology companies, especially those struggling for dominance in the cloud, especially Alphabet, Amazon, Microsofti IBM. ”

-Cole Lipsky



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