Acquisitions in the Cybersecurity Sector in 2024

Acquisitions in the Cybersecurity Sector in 2024

The following is a summary of mergers and acquisitions transactions in the cybersecurity sector in 2024.  We will update this post every two weeks as we work with more clients and learn of other deals in the sector.

The cybersecurity sector got off to a strong start in 2024, despite a drop in venture capital funding for companies in the sector in 2023.

As a result, valuations for small and medium-sized privately owned cybersecurity firms are close to their all-time highs and significantly higher than valuations for traditional businesses, including fast-growing SaaS businesses. The average small and medium-sized cyber security company is valued at 8x trailing twelve-month annual revenue.

For more information on how to value a small to medium size, privately owned cybersecurity firm, please read our article How to Value Your Cybersecurity Firm in 2025.

Who’s Driving M&A Activity in the Cybersecurity Sector

Based on the list below of mergers and acquisitions in the cybersecurity sector in 2024, the most active types of buyers are as follows:

● Cybersecurity Companies: The most active buyers are other cybersecurity companies seeking to expand their services, enhance technology, and increase market reach. There were at least 47 acquisitions by companies that are primarily focused on cybersecurity. Examples include Fortinet, CrowdStrike, CyberArk, Zscaler, Mimecast, and others.

● Private Equity Firms: These firms are making significant investments in the cybersecurity sector, often looking to build their portfolios and profit from the growing market. There were at least 11 acquisitions by private equity firms, including AE Industrial Partners, Leeds Equity Partners, Thoma Bravo, EQT, Haveli Investments, Permira, Accel-KKR, Clearlake/Francisco Partners, Hg, and others.

● Technology Companies: Many technology companies are acquiring cybersecurity firms to integrate security solutions into their existing products and services. There were at least 10 acquisitions or potential acquisitions by technology companies. Examples include Google, HPE, Cisco, OpenText, Akamai, Cloudflare, SonicWall, Visa, and Mastercard.

● Managed Services Providers: These firms are acquiring cybersecurity companies to enhance their security offerings and provide comprehensive solutions to their clients. There were at least 4 acquisitions by managed services providers, including Integrity360, Lumifi, N-able, and Magna5.

● Telecommunications Companies: These companies are expanding their services and capabilities by acquiring cybersecurity firms. There was at least 1 acquisition in this category, with TELUS acquiring Vumetric Cybersecurity.

● Other Companies: Companies across various industries, such as financial services and healthcare, are acquiring cybersecurity firms to integrate these services into their businesses. There were at least 7 acquisitions by companies in this category including Health Catalyst, Experian, PDI Technologies, Mitsui, Parsons, and Orange.

It’s worth noting that some companies might fit into multiple categories. For instance, some technology companies also offer managed services. Also, the exact number of transactions may vary depending on how the data is categorized.

This list is not exhaustive, as many smaller transactions are not publicly announced. The data only represents the deals that we learned about through our network or were directly involved in.

Acquisitions in the Cybersecurity Sector in 2024

Below is a summary of the mergers and acquisition transactions in the Cybersecurity Sector so far in 2024.  This is not an exhaustive list, as many smaller transactions are never announced.  This list only represents the deals we have learned about through our network or have been directly involved in.  I’ll do my best to update the list every two weeks.

Trends in Cybersercurity M&A

Based on the provided data, several trends are driving acquisitions in the cybersecurity sector. These trends can be summarized as follows:

● Expansion of Service Offerings and Capabilities: A primary driver is the desire of cybersecurity companies to expand their service portfolios and technological capabilities. Many cybersecurity firms are acquiring companies with specialized expertise or complementary technologies to offer more comprehensive security solutions. This is evidenced by the numerous acquisitions of companies that provide services like cloud security, AI-powered security, API security, and threat intelligence. For example, Fortinet acquired Perception Point to enhance its email security offerings, and CrowdStrike acquired Adaptive Shield to provide unified protection against identity-based attacks.

● Market Consolidation and Increased Market Reach: Mergers and acquisitions are also being used to achieve market consolidation and expand market presence. Established companies are acquiring smaller firms to increase their customer base, penetrate new markets, and consolidate their positions in the industry. This is seen in acquisitions such as Integrity360 acquiring Adsigo to expand its European presence, and Lumifi’s acquisitions to expand its healthcare cybersecurity services.

● Integration of Advanced Technologies: The need to integrate advanced technologies, such as AI, is another key trend. Several acquisitions involve companies specializing in AI-driven security solutions, such as Proofpoint acquiring Normalyze, a data security posture management (DSPM) leader, and Cisco acquiring Robust Intelligence for enhanced AI security capabilities. This reflects the growing importance of AI in combating increasingly sophisticated cyber threats.

● Private Equity Investment: Private equity firms are playing a significant role, actively acquiring cybersecurity companies to build their portfolios and capitalize on the growing cybersecurity market. These firms often invest in companies with strong growth potential and innovative technologies, aiming for profitable exits in the future. Examples include Thoma Bravo’s acquisition of Darktrace and EQT’s acquisition of Acronis.

● Demand for Managed Security Services: The rise in demand for managed security services is driving acquisitions in the sector. Many companies are seeking comprehensive security solutions without having to manage them internally. Managed services providers are acquiring cybersecurity firms to enhance their offerings and cater to this growing demand. For example, N-able acquired Adlumin to expand its managed security services.

● Integration of Security into Broader Tech Platforms: Technology companies are acquiring cybersecurity firms to integrate security solutions directly into their platforms and services. This is apparent in acquisitions such as HPE’s purchase of Juniper Networks to enhance networking and security and Akamai’s acquisition of Noname Security to improve API security. This trend shows a recognition that security is a critical component of all technology offerings.

● Cross-Industry Integration of Cybersecurity: Companies from various industries are integrating cybersecurity into their business. Firms across industries, such as financial services, healthcare, and others, are acquiring cybersecurity firms to enhance their businesses. This is seen in acquisitions such as Experian buying ClearSale and Health Catalyst acquiring Intraprise Health.

In summary, the cybersecurity sector’s acquisition trends are being propelled by the need for broader service offerings, market consolidation, the integration of advanced technologies like AI, the strategic investments of private equity firms, the need for managed security services, the integration of security into broader tech platforms, and the increased need for cybersecurity across all sectors. These trends highlight the dynamic nature of the cybersecurity industry and the increasing importance of cybersecurity in the modern business landscape

We will update this post every two weeks as we learn about other transactions and close more deals in the cybersecurity sector.

Read our previous article for information about How to Value Your Cybersecurity Firm in 2025.

About the Author and Jackim Woods & Co.

Rich Jackim is an education industry investment banker, education industry entrepreneur, and former mergers and acquisitions attorney.

For the last 25 years, Rich and his team have been providing boutique investment banking services to middle-market companies in a wide range of industries.

Rich also founded a successful training and certification company called the Exit Planning Institute, which he sold to a private equity group in 2012.

Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.

Jackim Woods & Co offers skilled mergers and acquisitions advisory services to software, SaaS, Edtech, and cybersecurity companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.

If you own a cybersecurity-related business and are interested in exploring your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.