Booz Allen announced plans to acquire EverWatch from private equity firm Enlightenment Capital for $440 million in March 2022. EverWatch is a full-service government solutions company that offers cybersecurity, data science and intelligence solutions to the U.S. defense and intelligence community.
The DOJ alleged that the deal violated Section 1 of the Sherman Antitrust Act, since it allegedly reduces each company’s incentive to bid aggressively. The DOJ also claimed that the deal violated Section 7 of the Clayton Antitrust Act since it would allegedly reduce competition.
Fast forward to early October 2022, and a federal judge in Maryland ruled against the government's effort to stop the M&A deal, Reuters reported -- apparently clearing the way for the deal's completion.
This is technology M&A deal number 273 that MSSP Alert and sister site ChannelE2E have covered so far in 2022.
Booz Allen Acquires EverWatch: About the Cybersecurity M&A Deal
Booz Allen has a Top 250 MSSP business unit. The company, based in McLean, Virginia, employs approximately 29,300 people globally and had revenue of $8.4 billion for the 12 months ended March 31, 2022.
EverWatch, founded in 1999, is based in Reston, Virginia. The company has 141 employees listed on LinkedIn. Key areas of expertise include:
- Defense areas such as intelligence, surveillance and reconnaissance (ISR), counterterrorism, data science, insider threat, cloud services, policy and planning.
- Intelligence including human, signals, cybersecurity, specialized solutions engineering, intelligence tools and technology, and counterintelligence.
- Deployed mission support including allied capacity building, specialized mission expertise, program/project management, rule of law, education and outreach.
In a prepared statement about the acquisition, Tom Pfeifer, national security sector president at Booz Allen, said:
“EverWatch’s talented workforce, national security expertise and core technical capabilities are an exceptional strategic fit with Booz Allen’s deep mission insights and robust portfolio of full-spectrum cyber operations, mission analytics, AI, and 5G offerings. The combination will deliver tremendous value to our clients as we work together to navigate a dynamic threat landscape and transform U.S. national cyber capabilities."
Added John Hillen, CEO of EverWatch:
“Booz Allen and EverWatch share a passion for the national security mission, advanced innovation, and technical excellence. We are excited to join Booz Allen and look forward to working together to deliver exceptional support to clients in the intelligence community and beyond."
Booz Allen Hamilton: Cybersecurity Strategy
Booz Allen CEO Horacio Rozanski described the company's overall growth and cybersecurity strategy in July 2022.
In the cyber market, “I would characterize our position as one of first-mover advantage,” Rozanski told Wall Street analysts during Booz Allen Hamilton’s quarterly earnings call on Friday, July 29, 2022. “We have been working with the intelligence community on some of the toughest cyber challenges going on for decades. I can point you to Mike McConnell, who is former director of Booz Allen in the mid-’90s. Fast forward to 2022, and Booz Allen has “the scale and the know-how” in the cyber market.
M&A Strategy: Booz Allen's war chest from 2021 through 2025 includes $3.5 billion to $4.5 billion in total capital deployment that “prioritizes strategic acquisitions,” Booz Allen CEO Horacio Rozanski told Wall Street analysts in January 2022. Clearly, the company has allocated some of that money for cybersecurity acquisitions.
Venture Capital Fund: Moreover, Booz Allen launched a $100 million venture capital arm in July 2022. The VC effort will invest in early-stage companies and technologies within four core areas of demand:
- Artificial intelligence/machine learning
- Deep technology
Partnerships also remain central to the cybersecurity strategy. Key moves include working with:
- Acalvio Technologies to help government organizations detect, investigate & respond to cyber threats in IT & OT environments.
- CyberSaint to measure, monitor and manage end-customer cybersecurity risks.
- Elevate to gain visibility into customers' internal cyber risks.
- NVIDIA to analyze massive amounts of data and pinpoint cyber threats faster.
Where is Booz Allen heading next in the cybersecurity market? We'll seek clues during the company's Q2 fiscal 2023 earnings call on Friday, October 28.