Cybersecurity mergers and acquisitions and capital markets update

May 6, 2022

In this article for Industrial Cybersecurity Pulse, Clint Bundy shares his insights on mergers & acquisitions activity in the cybersecurity market.

While the mergers and acquisitions (M&A) and capital raise markets have a wary eye on numerous potential macroeconomic headwinds — the Ukrainian war, inflation, the great resignation — the cybersecurity market continues to demonstrate its strength and to attract a great deal of interest. Strategic buyers and financial sponsors (i.e., private equity groups, family offices, debt and equity groups) see the enormous growth opportunities in the market as justification for paying premium valuation multiples for cybersecurity-oriented firms.

Pitchbook, a content platform dedicated to M&A and capital markets, recently stated, “We expect to see many more private equity-backed cybersecurity deals as the market expands with increasing interest; concerns about cyberattacks only heightened with Russia’s invasion of Ukraine, and the Securities and Exchange Commission (SEC) proposed enhanced rules and disclosures regarding cybersecurity by public companies in early March, showing that the industry continues to be an important and developing area of focus.”

The range of recent cybersecurity deals highlighted in this article demonstrates the diversity in capital and buyer options that are focused on this attractive segment. Recent examples of strategic buyers and financial sponsors targeting the cybersecurity market include an international consulting firm (Booz-Allen), a special purpose acquisition corporation (Mount Rainier Acquisition Corp.), global technology titan (Google) and an international private equity firm (EQT). Furthermore, recently announced transactions show the variety of company offerings and capabilities tied to the cybersecurity market.

These representative transactions include a firm offering traditional cybersecurity technology solutions and services (Mandiant), a company that offers cybersecurity training and certification training programs (EC-Council) and a renewables-focused cybersecurity provider (Green IT Energy). The M&A and capital raise markets’ recognition of the growth in the cybersecurity space, as well as the multiple ways that acquisition and investment candidates can service this segment, validates the enormous strength of the cybersecurity market.

About Bundy Group

Bundy Group is an industry-focused investment bank that specializes in representing business owners and management teams in business sales, acquisitions, and capital raises. The team of highly experienced investment bankers leverages extensive industry knowledge and experience to provide hands-on guidance to clients through every phase of the transaction. With over 250 closed deals over the past 33 years, Bundy Group’s primary goals are to provide high quality options and actionable insights and to deliver an optimal strategic fit at a premium value for our clients.

Bundy Group Securities, LLC, is a registered broker-dealer and member of FINRA and SIPC. Check the background of Bundy Group Securities, LLC at FINRA's BrokerCheck.

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