While 2021 has been described as a “crazy year” for M&A transactions around the world, 2022 could also be a particularly dynamic year for corporate sales and acquisitions. One sector already stands out: cybersecurity. These highly strategic technology companies are currently trading at unprecedented levels. AURIS Finance experts explain.
US$77.5 billion. This is the total value of transactions made worldwide to acquire cybersecurity-focused companies in 2021. Momentum, a consulting firm, reports that a total of 83 deals exceeded the $100 million mark.
By way of comparison, the total value of M&A transactions in the cybersecurity sector in 2020 was $19.7 billion, a more than threefold increase in volume, in a single year.
Large-scale transactions are driving up volumes
Very large deals drove the value of transactions recorded in 2021. For example, US private equity firm Thoma Bravo acquired Proofpoint for $12.3 billion. Similarly, NortonLifeLock merged with Avast PLC for $8.4 billion. Finally, Auth0 became the property of Okta for $6.4 billion.
Greater security needed as economies go digital
The digitalisation of the economy is one of the reasons why venture capitalists and specialist companies are so keen to invest in cyber companies. The health crisis has accelerated the dematerialisation of many processes. The result is an increased need for systems control and security. “We have entered a new era in which cyber risk threatens all organisations, whether commercial or governmental,” says Dave DeWalt, founder and CEO of Momentum Cyber, in the consultancy’s report. As a result, all organisations are now affected and need to protect themselves against the risk by equipping themselves with appropriate software.
The cybersecurity craze is set to intensify further
The dematerialisation of the economy is being exacerbated by geopolitical tensions and the recent Russian offensive against Ukraine. If the conflict is armed, it is also virtual. In addition to conventional weapons, cyber-attacks between the two sides are now an integral part of the war. Many European countries now fear a massive attack on their systems from Russia. Against this backdrop, the need to secure systems is immense. And specialist companies are seeing their valuations soar.
Experts at your service
According to data compiled by Momentum, companies specialising in security, risk, compliance, cloud security, data security, and threat response continue to be the most sought after by investors. Alongside the giants of the sector, small companies that have developed innovative technology are also highly sought after by investors and large companies looking to develop or strengthen part of their service offering. Whatever your situation, AURIS Finance experts are at your side. Our sector-specific teams are able to provide solutions for all your needs.
