Top 10 cybersecurity acquisitions of 2018
Value of M&A deals falls year on year in 2018, while the volume of deals increases
The value of M&A activity in the cybersecurity space fell last year, according to investment firm Momentum Cyber.
Momentum stated that, in total, the M&A deals seen in 2018 equated to $15.5bn (£11.7bn) in enterprise value, down 23.6 per cent on the $20.3bn seen in 2017.
The second half of 2018 saw the value of the acquisitions made hit $10.4bn - double the $5.2bn seen in H1.
The number of deals, however, increased from 178 to 183.
Momentum claimed that the largest number of deals came in the identity and access management space (32), followed by consultancy services (29) and incident response (23).
We have ranked the top 10 acquisitions below, based on Momentum's annual report.
10. LogRhythm acquired by Thoma Bravo
Security information and event management (SIEM) player LogRhythm was snapped up by serial tech acquirer Thoma Bravo, in a deal that Momentum pegs at a value of $525m.
At the time, LogRhythm CEO Andy Grolnick said the vendor sought an acquisition to take it "to the next level", citing Thoma Bravo's credentials in the cybersecurity space as key to the deal.
LogRhythm claims to be the pioneer of SIEM technology, with over 2,500 enterprise customers.
Thoma Bravo highlighted LogRhythm's "impressive track record of growth" when announcing the acquisition.
9. InfoArmor acquired by Allstate
Arizona-based InfoArmor was acquired by $40bn-revenue Allstate, one of the largest insurance firms in the US, for $525m.
InfoArmor provides employee identification protection, which helps prevent identity fraud.
The vendor claims to see its flagship product PrivacyArmor offered to employees of 100 Fortune 500 companies. It says the product "alerts users at the first sign of fraud and restores the individual's identity".
On its website, InfoArmor says the product scours the dark web searching for compromised credentials, and then alerts the user if they are at risk. It also says it will reimburse bank accounts that have been subjected to an attack.
8. AlienVault acquired by AT&T
Security giant AlienVault was snapped up by US telecoms giant AT&T in July. Terms of the deal were not disclosed, but the fee was reported to be $600m.
AlienVault's flagship product is its unified security management platform, which offers solutions around threat detection, hunting, response and compliance. It claims this platform can boost detection speeds by 80 per cent.
The vendor has been rolled into AT&T Cybersecurity, although its branding is still in use.
AT&T said it plans to utilise AlienVault's capabilities to boost cybersecurity offerings to SMBs.
AlienVault CEO Barmak Meftah said: "Together we have the opportunity to simplify a complex problem and automate how customers tackle their cybersecurity needs.
"We will combine our phenomenal threat detection, incident response, and compliance security platform with AT&T's managed security capabilities, making near real-time threat information actionable and achievable."
7. BeyondTrust acquired by Bomgar
Bomgar announced the acquisition of privileged access management (PAM) vendor BeyondTrust in September, with the combined business taking the latter's name.
The deal created the "most comprehensive" PAM vendor in the space, the vendor said, after Bomgar had itself been acquired by Francisco Partners earlier in the year (see below).
BeyondTrust CEO Kevin Hicky said: "The BeyondTrust family is excited to join the dynamic Bomgar and Francisco Partners teams.
"I am confident that the additional investment and scale resulting from this combination will drive innovation for our customers and new opportunities for our partners as we expand our leadership position in the fast-moving privileged access management market."
Top 10 cybersecurity acquisitions of 2018
Value of M&A deals falls year on year in 2018, while the volume of deals increases
6. Bomgar acquired by Francisco Partners
Private equity firm Francisco Partners bolstered its portfolio with the acquisition of Bomgar (later to merge with BeyondTrust) in April last year.
Francisco holds various tech investments, including Blue Coat, Mitel, Quest and SonicWall.
Terms of the acquisition were not disclosed, but Momentum reported that the deal valued Bomgar at $800m.
Francisco CEO Dipanjan Deb said: "Bomgar has become a key competitor in the secure remote and privileged access management markets, driven by its innovative platform of secure access solutions and steadfast commitment to customer service excellence."
Founded in 2003, PAM player Bomgar also has remote support product, claiming to have over 13,000 customers worldwide.
Bomgar itself made an acquisition in February last year, snapping fellow access management player Lieberman Software.
5. ThreatMetrix acquired by LexisNexis
LexisNexis Risk Solutions shelled out $830m for vendor ThreatMetrix in January.
ThreatMetrix provides cloud-based security, focusing on fraud prevention and identity solutions.
The vendor was founded in 2005 and claims to have "pioneered" the digital identity space. It has had a partnership with LexisNexis Risk Solutions for the last two years.
The risk arm of legal giant LexisNexis uses technology to give its customers the tools to evaluate business decisions and foresee potential hazards.
4. Veracode acquired by Thoma Bravo
Thoma Bravo announced its deal for Veracode in November, spending a mammoth $950m in cash on the application security testing vendor.
The acquisition was part of a domino effect that saw CA acquire Broadcom (which acquired Veracode in 2017), before Broadcom in turn sold Veracode.
Veracode's platform aids developers finding and fixing security flaws during the software development cycle.
Thoma Bravo has a long track record in the security space, having previously invested in firms including Barracuda, LogRhythm, Bomgar and SailPoint.
Veracode CEO Sam King said: "At a time when the need for application security could not be any greater, we are pleased to be partnering with Thoma Bravo, an investment firm that has a strong track record in security and that recognises the importance of fuelling continued innovation to further extend our leadership position."
Top 10 cybersecurity acquisitions of 2018
Value of M&A deals falls year on year in 2018, while the volume of deals increases
3. Cylance acquired by BlackBerry
BlackBerry continued its metamorphosis from a smartphone manufacturer to an enterprise security player by acquiring Cylance - one of end-point security's hottest market entrants just a few years ago.
Cylance had been expected to IPO at some stage, following fellow next-gen players CrowdStrike and Carbon Black, and was valued at $1bn in 2016 - making its $1.4bn price seem relatively low.
CrowdStrike claims to be worth $3bn.
BlackBerry CEO John Chen said: "Cylance's leadership in artificial intelligence and cybersecurity will immediately complement our entire portfolio.
"We believe adding Cylance's capabilities to our trusted advantages in privacy, secure mobility, and embedded systems will make BlackBerry Spark indispensable to realising the enterprise of things."
2. Imperva acquired by Thoma Bravo
Thoma Bravo's third and final contribution to this list came in its monster $2.1bn acquisition of Imperva, taking the database security vendor off the Nasdaq market.
Imperva provides a range of security offerings including web application firewalls, threat intelligence, DDoS protection and threat intelligence.
The Imperva management team has stayed in place since the deal closed.
CEO Chris Hylen said: "Thoma Bravo has an excellent track record of supporting and adding value to leading cybersecurity companies, and we are delighted to bring on a partner with their calibre of strategic expertise."
"This transaction will provide immediate and substantial value to Imperva stockholders. The company will have greater flexibility to focus on executing our long-term strategy. We are excited to begin our partnership with Thoma Bravo."
1. Duo Security acquired by Cisco
Networking giant Cisco announced its third multi-billion acquisition in two years in August, snapping up two-factor authentication vendor Duo Security for $2.35bn in August.
The deal came less than a year after Cisco acquired BroadSoft for $1.9bn, and under two years after it moved for AppDynamics in a $3.7bn deal.
David Goeckeler, general manager of Cisco's networking and security business, said: "In today's multi-cloud world, the modern workforce is connecting to critical business applications both on- and off-premise.
"IT teams are responsible for protecting hundreds of different perimeters that span anywhere a user makes an access decision.
"Duo's zero-trust authentication and access products integrated with our network, device and cloud security platforms will enable our customers to address the complexity and challenges that stem from multi- and hybrid-cloud environments."
Duo CEO Dug Song has remained at the helm.
When the acquisition was announced he said: "Cisco is not only the world's largest networking company, but also the world's leading enterprise security business.
"They agree with us on the past state of security, and we're going to fix it together. They have a long and successful history of acquiring companies to support and accelerate their strategic initiatives."