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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).
D. Howard Kass

D. Howard Kass is a contributing editor to MSSP Alert. He brings a career in journalism and market research to the role. He has served as CRN News Editor, Dataquest Channel Analyst, and West Coast Senior Contributing Editor at Channelnomics. As the CEO of The Viewpoint Group, he led groundbreaking market research.