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News: Press releases & Industry News
17
NOV
Press Releases

Covid Heightens Need for Cybersecurity in Digital World

Cybersecurity, AI, Enterprise Software, SaaS & Cloud, News

• While the world is focused on the health and economic threats posed by Covid, cyber criminals are capitalising on this crisis
 

London, UK - 17 November 2020. Hampleton’s latest Cybersecurity M&A report highlights the importance of cybersecurity vendors as all industries seek protection from cyber-attacks, now that millions more people are working and learning from home using VPN networks and potentially suboptimal computer equipment and inadequate cybersecurity. 

Hampleton’s latest Cybersecurity M&A report finds that all industries are seeking protection from cyber-attacks, now that millions more people are working and learning from home.

Henrik Jeberg, director, Hampleton Partners, said: “A spike in phishing attacks, Malspams and ransomware attacks has forced companies digitising their processes to double down on IT and cybersecurity improvements.

“As a result, the IT Security Services segment has seen a rise in M&A activity, as firms continue to outsource their IT and cybersecurity needs. We expect this trend to continue as businesses narrow in on some of their IT vulnerabilities in ways they may not have needed to until now.”

The international tech M&A dealmakers’ report shows that overall deal flow in the cybersecurity space has been relatively consistent since 2015, with a record spike of 242 disclosed deals in 2019.

Projected volume of 196 deals for 2020 suggests that the coronavirus pandemic has not drastically affected total deal volumes. Valuations in the sector have stayed strong, with EV/S multiples trading at around 5x - rather than around 3x seen in the wider enterprise software M&A market.

 

IT security sector M&A

As the largest subsector within the cybersecurity space with 46 per cent of global M&A activity, IT Security Services looks on track to achieve a total of 50 deals in the second half of 2020, up 25 per cent on the first half total.

Example deals include TA Associates’ portfolio company HelpSystems merger with GlobalSCAPE in a deal worth $178 million. The deal is set to augment HelpSystems’ data security business, which includes data loss prevention and data classification software. The combined company will focus on providing the most comprehensive collection of trusted security and automation solutions to customers worldwide.

Also, security integration firm Allied Universal’s two acquisitions in the past 12 months, acquiring Advent Communications Systems and Phoenix Systems & Service (PSSI) both for undisclosed amounts.

Advent is a low-voltage integrator of IP video, access control, structured cabling and audiovisual systems with revenues exceeding $42 million and 125 employees.

PSSI provides security systems integration to businesses and has revenues exceeding $16 million and is known as one of the premiere integrators for access control, digital video, optical turnstiles and intercom systems in the U.S.

 

Private equity in cybersecurity

PE firms have funnelled significant investment into cybersecurity – including via their portfolio companies – with a focus on larger, more established targets. The share of financial buyers came in at approximately 36 per cent so far this year, much higher than previous shares which oscillated between 3 per cent and 26 per cent since 2010. This is likely to continue as Covid has forced some strategic buyers to stall their M&A activity, while financial buyers are sitting on large amounts of potential investment and will continue to have access to cheap debt in the near future.

 

Largest disclosed deals in the past 12 months

The top three deals by deal value were:

  • Thoma Bravo LLC acquired Sophos for $3.8 billion
  • Symphony Technology Group/Ontario Teachers/Alpinvest Partners acquired RSA Security Inc. for $2.1 billion
  • Advent International/Crosspoint Capital Partners acquired ForeScout Technologies Inc.for $1.7 billion

 

Media enquiries, photography or interview requests, please contact:

Jane Henry
Email: jane@marylebonemarketing.com
Mob: +44 789 666 8155
www.marylebonemarketing.com 

Note to editors
Hampleton Partners’ M&A Market Reportsarecompiled using data and information from the 451 Research database (www.451research.com).

Download the full Hampleton Partners’ Cybersecurity M&A Report here:
https://www.hampletonpartners.com/reports/cybersecurity-report/

 

About Hampleton Partners

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services. 

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For more information visit https://www.hampletonpartners.com.

 

Contact

Contact Hampleton Partners for a confidential conversation regarding any of your merger and acquisition or corporate finance needs with one of our Directors or Sector Principals: https://www.hampletonpartners.com/contact/.