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Cybersecurity Merger, Acquisition Momentum Continues

Cybersecurity merger and acquisition (M&A) activity reached its second highest level of the year in October, 2018, hitting $2.5 billion in combined deals, just behind the $2.9 billion two months earlier, according to Momentum Cyber’s Security Snapshot.

The month saw Thoma Bravo’s buyout of Imperva for $1.8 billion, and included other large acquisitions:

Of the 18 M&A deals during October, four were consummated in the application security segment, three in security operations/incident response/threat intelligence, and three in cloud security, the report said. Company officials presented the data last week at the ninth annual SINET Showcase in Washington, D.C.

Financing Statistics

Financing activity for the month remained steady, Momentum said. Some 32 financing transactions raised a total of $672 million.

  • The median amount raised was $9 million.
  • Nearly 60 percent of the financing deals in the month were early stage (seed to series A), with the median amount raised for early stage deals at $6 million.
  • The most active sectors in October included network & infrastructure security with six deals, security operations/incident response/threat intelligence with four and four in data security.

The most noteworthy fund raising activity in October was:

  • Tanium’s $200 million later stage.
  • Team 8’s $85 million.
  • Artic Wolf’s $45 million Series C round.

For 2018 to date in the cybersecurity market, $12.6 billion has changed hands in 157 M&A transactions and there has been 340 financing deals valued at $5.1 billion, Momentum figured.

MSSP Merge and Acquisition Activity

Looking back, in the quarter ended September, 2018 managed security service providers (MSSPs) ranked among the top sectors for merger and acquisition (M&A) activity, the analyst said. During the period strategic deal making accelerated, with 137 transactions deploying $6.4B across M&A (38 transactions valued at $5 billion) and financing (99 transactions worth $1.4B). Deal value for the period increased 204 percent from the prior quarter.

Financing activity for the quarter included the following:

  • 54 percent of deals were early stage (seed to Series A), with a median amount raised of $4 million, The remainder were late-stage (Series B+) with a median amount raised of $18 million.
  • The most active sectors for financing activity in Q3 2018 included risk & compliance (15), identity & access management (14), security operations/incident response/threat Intelligence (13) and network & infrastructure security (13).

Key players/deals in the period included:

  • Cisco acquires Duo Security.
  • Bomgar/BeyondTrust merger.
  • AT&T acquires AlienVault.
  • Allstate acquires InfoArmor.
  • Thoma Bravo acquires Centrify.

Those deals accounted for 92 percent of total Q3 2018 disclosed deal value, with a total of $4.6B.

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