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Cybersecurity M&A Deal Values, MSSP Buyouts: Q1 2019 Report

Strategic merger and acquisition (M&A) activity in the cybersecurity segment increased in Q1 2019 with 147 transactions completed totaling $5.3B in overall deal value, according to Momentum’s Cybersecurity Market Review Q1 2019.

The quarter saw mixed year-over-year results: Value (42 M&A transactions totaling $3.3 billion) slid 28 percent from the same period last year but volume (105 financing transactions for $2 billion) amounted to a 32 percent bump from the year prior. More deals involving managed security service providers (MSSPs) were done during Q1 2019 than any other segment Momentum tracked.

Notable financing transactions

Of the $2 billion in financing volume in Q1 2019, here are the top deals:

  • Rubrik: $261 million
  • Cloudflare: $150 million
  • 360 Enterprise Security Group: $131.2 million
  • Onelogin: $100 million
  • Contrast Security: $65 million
  • Illumio: $65 million
  • Shift Technology: $60 million
  • Cato: $55 million
  • KnowBe4: $50 million
  • eSentire: $47.6 million

Notable M&A transactions

Of the $3 billion in M&A value in Q1 2019, here are the top deals:

  • Carbonite acquired Webroot: $618.5 million
  • Palo Alto Networks acquired Demisto: $560 million
  • Perforce bought Rogue Wave: $480 million
  • NTT Security bought WhiteHat: $315 million
  • GBG acquired IDology: $300 million
  • Zix bought AppRiver: $275 million
  • Symantec bought Luminate: $170 million
  • Orange bought Secure Data: $157 million
  • Akamai bought Janrain: $125 million
  • ACL bought R-sam: $100 million

Here are additional high points from Momentum’s report:

Public Market Valuations

  • Q1 2019 continued the upward trend line from the prior quarter with public security stocks rising 19 percent.
  • There were no Cybersecurity IPO’s in Q1 2019.
  • Crowdstrike, Palantir, Tufin, and Ping Identity are expected to go public in 2019.

M&A Activity

Financing Activity

  • Total financing activity is on par with Q1 2018 but volume has doubled.
  • More than 75 percent of Q1 2019 financing volume was from later stage financing (Series B & above).
  • The most active sectors in Q1 2019 were: Risk & compliance (14), network & infrastructure security (13), and identity & access management (9).
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