BB - US Cybersecurity M&A Activity Remains Strong: GlobalData
According to a report from GlobalData released on Thursday (September 12), the US remained at the helm of cybersecurity mergers and acquisitions (M&A) between 2014 and 2018.
Symantec (NASDAQ:SYMC), Palo Alto Networks (NYSE:PANW) and Proofpoint (NASDAQ:PFPT) had the highest number of cybersecurity acquisitions out of any company. During the five year period, the report noted the trio underwent seven acquisitions each.
For example, in November 2018, Symantec acquired identity management firm Javelin Networks. Prior to that, it acquired two companies for over US$2 billion: cybersecurity hardware firm Bluecoat for US$4.6 billion and identity theft company, LifeLock for US$2.3 billion.
In a further sign of heightened US acquisition activity, in 2018, the top five acquisitions surpassed US$36 billion. Paving the way was Broadcom’s (NASDAQ:AVGO) US$18 billion acquisition of CA Technologies in July, followed by General Dynamics (NYSE:GD) US$9.7 billion acquisition of CSRA, Science Applications International’s (NYSE:SAIC) US$4.1 billion acquisition of Engility Holdings, Cisco Systems (NASDAQ:CSCO) acquisition of Duo Security for US$2.3 billion and GTT Communications (NYSE:GTT) US$2.3 billion acquisition of Interoute Communications.
In total, the US accounted for 70 percent of all cybersecurity M&A activity during the time period.
During that same time period, non-US firms Sophos (LSE:SOPH) and Blackberry (TSX:BB, NYSE:BB), followed next in line, showing six and five acquisitions, respectively.
As the frequency and scale of cybersecurity threats increase, it is causing the M&A space to expand outside of cybersecurity firms.
“Companies, other than software vendors and core cybersecurity players, are also pursuing M&A aggressively and foraying into the promising space in a big way,” Aurojyoti Bose, financial deals analyst at GlobalData, said in a press release.
Along with the increase in cybersecurity threats, the General Data Protection Regulation in Europe is influencing companies to increase their investments in security infrastructure and customer privacy protocols, the report added.
According to a July report from Research And Markets, the global cybersecurity market is projected to reach US$241.1 billion by 2025, growing at a compound annual growth rate of 11 percent annually. In 2018, the cybersecurity for North America stood at US$44.6 billion alone.
“Going forward, the momentum in mergers and acquisitions (M&A) activity in the cybersecurity space is likely to stay,” said Bose.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.