Cloud security sector leads cybersecurity mergers and acquisition report

SIEM, threat intelligence and mobile security also show M&A movement.

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Global Defense and National Security Systems acquires STG Group, a cybersecurity provider to the U.S. federal government, for $165.5 million in cash and equity. Global Defense will pay $75 million in cash and 8.58 million of its shares, valued at $10.55 each, to Reston, Va.-based STG. Global Defense, a special purpose acquisition company, said in a Securities and Exchange filing that it intends to fund a portion of the purchase with debt financing.

Level 3 Communications acquires privately held Black Lotus, a provider of global Distributed Denial of Service (DDoS) mitigation services. The acquisition of Black Lotus represents another step in Level 3’s continued commitment to provide leading security product capabilities. Level 3 acquired the outstanding equity of Black Lotus in an all-cash transaction on July 1, 2015. Terms of the transaction were not disclosed.

ManTech International Corporation acquires Knowledge Consulting Group, a rapidly growing cyber security adviser in both the public and private sectors focused on anticipating threats and implementing defensive countermeasures. ManTech will fund the acquisition from cash on hand with additional funding from its existing line of credit.

Microsoft has signed a letter of intent to acquire Israeli cloud security firm Adallom for $320 million, according to The Wall Street Journal.

Opera Software acquires SurfEasy, a Toronto-based company that provides an easy-to-use VPN solution for protecting customers’ online privacy and security on smartphones, tablets and computers. The two companies envision a powerful collaboration and venture into joint products, expanding on Opera’s product footprint.

Raytheon Company and Vista Equity Partners have completed a joint venture transaction creating a new company that combines Websense, a Vista Equity portfolio company, and Raytheon Cyber Products. Raytheon owns 80.3% of the new company. Vista Equity Partners owns 19.7%. Raytheon has invested $1.9 billion (net of cash acquired) to acquire Websense, of which $600 million is in the form of an intercompany loan to the joint venture. Raytheon has also contributed the assets of Raytheon Cyber Products and related intellectual property, which is valued at $400 million. Vista Equity Partners has made a new cash investment of approximately $335 million for 19.7 percent of the equity interest in the joint venture.

Salesforce.com bolstered its mobile security when it recently acquired Toopher, a 4-year-old two-factor authentication startup out of Texas. Although terms of the deal were not disclosed, Business Insider reported that Salesforce granted a total of 37,408 shares to Toopher’s seven employees – worth approximately $2.5 million at the time.

Splunk, provider of the leading software platform for real-time Operational Intelligence, acquires Caspida, a leading innovator in machine learning and behavioral analytics. Under the terms of the agreement, Splunk has acquired all of the outstanding stock of Caspida for an aggregate purchase price of approximately $190 million, including approximately $127 million in cash and $63 million in restricted Splunk securities.

Splunk ​also acquires Metafor, the Vancouver-based provider of anomaly-detection and behavioral-analytics technology for IT and security operations. The value of the transaction was not disclosed.

Singtel, Asia’s leading provider of infocomm technology (ICT) solutions, acquires Chicago-based data security and compliance solutions firm Trustwave for $810 million in cash. Following the close of the acquisition, Trustwave will operate as a standalone Singtel business unit and continue to be headquartered in Chicago, the company said.

Synopsys acquires Codenomicon, a global software security company based in Finland with a focus on software embedded in chips and devices. Codenomicon is known for independently discovering and reporting the Heartbleed bug. The additional talent, technology and products will expand Synopsys’ presence in the software security market segment.

​Next week we take a look at cybersecurity investments and IPO activity​ from the recent quarter. We'll tell you about some funds that are investing heavily in cybersecurity, $10 million to $100 million funding deals, and more. Stay tuned!

Copyright © 2015 IDG Communications, Inc.

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