Cybersecurity M&A deals announced ($bn)

Source: Mergermarket, Pitchbook, Copyright © 2023 S&P Global Market Intelligence [and its affiliates, as applicable] (Transactions with disclosed deal values announced within the cybersecurity industry between January 1 - November 5 2023)

Cybersecurity M&A deals announced with transaction values >$200m

Source: Mergermarket, Pitchbook, Copyright © 2023 S&P Global Market Intelligence [and its affiliates, as applicable] (Transactions with disclosed deal values announced equal to and above USD 200m within the Cybersecurity industry between January 1 2023 - November 5 2023)

Large strategic buyers in the cybersecurity sector are, in our view, increasingly looking to execute M&A transactions, with some, including Palo Alto Networks and Accenture having recently announced multiple acquisitions (see ‘Recent cybersecurity M&A transactions by large strategic buyers’ below):

  • On the technology side, recent M&A activity has been robust across multiple segments within the broader cybersecurity ecosystem, including cloud data (Dig[i]), cloud applications (Bionic, Ermetic[ii]), SaaS / web applications (Atmosec[iii], Talon[iv]), network / zero trust (Perimeter 81[v]), OT / ICS (Verve[vi]), email (Tessian[vii]), SIEM (Splunk[viii]), SOAR (Revelstoke[ix])
  • Managed and professional services, we’ve seen increased interest in adding scale, technology-enabled efficiency, gross margin expansion (again, Revelstoke) and accelerating international growth (Accenture’s acquisition of Innotec[x] in Spain and MNEMO Mexico[xi])

We believe strategic buyers are increasingly stepping in and executing M&A, given the pullback in venture funding[xii]. While private equity remains active and interested in cybersecurity, private equity buyers and PE-backed strategics face increasing challenges given the higher interest rates environment and the potential to trigger re-pricing of existing debt.

We have seen many sizeable deals recently, with disclosed values and premium valuation multiples providing an indication of health versus more distressed situations.

While, in our view, the market has normalized from peak valuation levels seen in 2021, companies performing well and positioned in priority capability areas can still attract premium revenue or ARR multiples.

Recent cybersecurity M&A transactions by large strategic buyers

Announced Date

Target

Acquirer

Transaction Value

Prem. / (Disc.)1

5-Nov

Talon Cyber Security[xiii]

Palo Alto Networks Inc. (NAS: PANW)

$625M

NA

31-Oct

Dig Security Solutions Ltd. [xiv]

Palo Alto Networks Inc. (NAS: PANW)

$400M

220%

30-Oct

Tessian Limited[xv]

Proofpoint Inc.

$361M

(2%)

21-Sep

Splunk Inc. (NAS: SPLK)[xvi]

Cisco Systems Inc. (NAS: CSCO)

$28,5B

60%

19-Sep

Bionic, Inc.[xvii]

CrowdStrike Holdings Inc. (NAS: CRWD)

$350M

NA

7-Sep

Ermetic Ltd[xviii]

Tenable Holdings Inc. (NAS: TENB)

$265M

NA

6-Sep

Atmosec Ltd. [xix]

Check Point Software Technologies Ltd. (NAS: CHKP)

NA

NA

10-Aug

Perimeter 81 Ltd.[xx]

Check Point Software Technologies Ltd. (NAS: CHKP)

$490M

(51%)

25-Jul

Imperva Inc.[xxi]

Thales SA (PAR: HO)

$3,6B

70%

 'Premium / (Discount) to last round post money valuation or share price one month prior to closing, where applicable

To find out more about any of the themes discussed, get in touch with the US cybersecurity team - Eric Wagner, Matt Fiore, and Ryan Frew

____________________________________________________________________________________

DC Advisory has prepared this material solely for informational purposes and it is not a research report. This material does not constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of any offer to buy, or any recommendation with respect to, any securities.

For other important information regarding the article, please our Insights and Publications disclaimer > 

Sources 

[i]   https://www.paloaltonetworks.com/company/press/2023/palo-alto-networks--announces-intent-to-acquire-cloud-security-start-up-dig-security

[ii]  https://investors.tenable.com/news-releases/news-release-details/tenable-increases-focus-cloud-security-agreement-acquire-cnapp

[iii]   https://www.checkpoint.com/press-releases/check-point-to-acquire-atmosec-an-innovative-saas-security-vendor-as-part-of-its-strategy-to-deliver-the-most-secure-sase-solution/

[iv]   https://www.paloaltonetworks.com/company/press/2023/palo-alto-networks--announces-intent-to-acquire-enterprise-browser-start-up-talon-cyber-security

[v] https://www.checkpoint.com/press-releases/check-point-to-acquire-perimeter-81-to-deliver-the-fastest-and-most-secure-sase-solution-in-the-industry/

[vi] https://www.rockwellautomation.com/en-us/company/news/press-releases/Rockwell-Automation-Signs-Agreement-to-Acquire-Verve-Industrial-Protection.html

[vii]   https://www.proofpoint.com/us/newsroom/press-releases/proofpoint-signs-definitive-agreement-acquire-tessian

[viii]   https://www.splunk.com/en_us/newsroom/press-releases/2023/cisco-to-acquire-splunk-to-help-make-organizations-more-secure-and-resilient-in-an-ai-powered-world.html

[ix]     https://arcticwolf.com/resources/press-releases/arctic-wolf-announces-intent-to-acquire-revelstoke/

[x] https://newsroom.accenture.com/news/2023/accenture-acquires-innotec-security-spain-based-leading-cybersecurity-company

[xi] https://newsroom.accenture.com/news/2023/accenture-expands-cybersecurity-services-capabilities-in-latin-america-with-acquisition-of-mnemo-mexico

[xii] https://news.crunchbase.com/cybersecurity/vc-funding-q3-bounce-back-2023/#:~:text=Startups%20%E2%80%A2%20Venture-,Cybersecurity%20Funding%20Sees%20Slight%20Bounce%20Back%20From,But%20Still%20Down%20From%202022&text=Venture%20funding%20to%20cybersecurity%20startups,down%2030%25%20year%20to%20year.

[xiii] https://www.channelfutures.com/mergers-and-acquisitions/palo-alto-networks-acquiring-talon-cyber-security-in-reported-625-million-deal

[xiv] 'https://siliconangle.com/2023/10/31/palo-alto-networks-acquires-dig-security-reported-400m/

[xv] https://www.bankinfosecurity.com/proofpoint-to-buy-tessian-to-infuse-email-protection-ai-a-23432

[xvi]https://www.reuters.com/markets/deals/ciscos-28-billion-splunk-deal-may-ignite-software-deal-frenzy-2023-09-26/

[xvii] https://www.calcalistech.com/ctechnews/article/hyquwtlka#:~:text=Cybersecurity%20giant%20CrowdStrike%20is%20acquiring,announced%20the%20deal%20later%20Tuesday

[xviii] 'https://www.tenable.com/press-releases/tenable-announces-intent-to-acquire-ermetic

[xix] 'https://www.checkpoint.com/press-releases/check-point-to-acquire-atmosec-an-innovative-saas-security-vendor-as-part-of-its-strategy-to-deliver-the-most-secure-sase-solution/

[xx] 'https://www.calcalistech.com/ctechnews/article/sj02hwf22#

[xxi] 'https://techcrunch.com/2023/07/25/thales-enters-app-security-market-with-3-6b-imperva-acquisition/