Channel investors, Content, EMEA, Europe, MSSP

Optiv Security Says European M&A Valuations Are Too High

Optiv Security has evaluated roughly 40 different cybersecurity companies for potential acquisition or investment in Europe, but declined to ink any M&A deals because the valuations were simply too high, Optiv says.

The statement represents a reality check for the overall MSSP and cybersecurity market in Europe, and also explains a strategic shift in Optiv's business strategy in the UK. Specifically, the Top 200 MSSP is downsizing its UK efforts near-term -- though Optiv says it remains committed to a global strategy.

No doubt, total spending on cybersecurity M&A deals has surged worldwide, according to Precise Security research. Also, M&A activity involving MSSPs has been steady and strong, for the most part, because of these five factors, according to MSSP Alert.

For its part, Optiv has been active on the M&A front over the past two years or so, buying Decision Lab and Conexsys.

Optiv Security's European Strategy: The Statement

Still, Optiv is exercising M&A restraint in Europe until valuations normalize, the company says. An extended statement from the company reads:

“In January 2018, we expanded our global footprint to the U.K., predicated on a strategy of growth by acquisition. Optiv evaluated ~40 different European companies and simply couldn’t justify the high valuations of these companies.

After a comprehensive strategic review, we’re downsizing our London-based organic operations. We remain committed to serving the European market, clients, partners and prospects.

Operations and investment in Canada and India are not impacted. In fact, we’re expanding our space in both locations. We’re working to open Optiv’s first Canadian-based security operations center (SOC) in Q1 2020 and we’re exploring the possibility of leasing an additional floor in our Bangalore office to accommodate as many as 70 additional new hires on our India team next year.

Optiv has a proud history of serving clients in Europe and in 70+ countries around the world, and that is not changing. We plan to consider M&A opportunities again in the future, once European valuations right size.

We remain 100 percent committed to our international strategy and to delivering innovative cybersecurity solutions that create simplicity and confidence for clients around the world.”

Cybersecurity Mergers and Acquisitions: Careful Due Diligence

Optiv isn't alone in its cautionary approach to M&A valuations. SonicWall CEO Bill Conner and his executive team carefully considered and declined numerous deals because of valuation concerns before finally finding a good fit with this week's Perimeter 81 Series A funding deal, MSSP Alert reports.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.