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The cybersecurity sector is consolidating

Thales Cybersécurité

Thalès continues its offensive in the cybersecurity market. The company has just announced two new acquisitions worth a total of €120 million. Experts at AURIS Finance, a merger and acquisition consultancy, take a closer look at this latest market move.

Since 2019, the French electronics giant, which specialises in aerospace, defence, security, and land transport, has been strengthening its position in the cybersecurity sector. The most important transaction was undoubtedly the one carried out in April 2019, when Thales acquired Gemalto. Thales paid €4.8 billion for the French digital identity and security giant. The deal is in line with the group’s stated ambition to develop its digital business around four main pillars: cybersecurity, data, artificial intelligence, and connectivity.

A fast-growing market

Two new companies have recently joined Thales. They are Excellium Services Group, a cybersecurity consulting and technology integration company, and S21Sec, a European cybersecurity specialist. With these acquisitions, Thales consolidates its leadership in the cybersecurity market. The two companies, which have operations in Belgium and Luxembourg, are expected to generate a turnover of €59 million in 2021 and employ nearly 600 people, bringing the group’s total workforce to more than 80,000. In 2022, Thales plans to recruit 11,000 people worldwide, including 1,000 dedicated exclusively to cybersecurity issues.

A sector undergoing consolidation

The market is currently booming: in 2021 alone, the total value of transactions for the acquisition of cybersecurity companies worldwide is estimated at $77.5 billion. The trend today is one of concentration, with large groups dominating and positioning themselves for smaller targets. Avisa Partners, for example, acquired Databack (data recovery) and LeakID (anti-hacking) at the beginning of June. Both deals enabled the business intelligence specialist to strengthen its cybersecurity and anti-counterfeiting unit. Avisa Partners spent around €20 million to acquire these two SMEs (around 50 employees at LeakID and less than ten at Databack). The group aims to achieve a turnover of €70 million by 2022, half of which will be generated directly by the cybersecurity business, which will take precedence over the other divisions: investigation, compliance, and research.

High levels of valuation

As the economy becomes increasingly digital, all organisations are affected by cyber threats. A recent study by IDC shows that the cybersecurity market in Europe has been valued at €34 billion in 2021, an increase of 8.3% over the previous year. This growth is expected to continue in the coming years, reaching €45 billion by 2025. Against this backdrop, technology companies are now looking to strengthen their cybersecurity capabilities. In order to grow quickly, they are acquiring target companies, often SMEs or ETIs, that are at the root of new technologies.

Get the support you need

Cybersecurity is at the heart of today’s industrial challenges. The acquisition market is very dynamic and favourable to sellers: the number of companies looking to buy is still higher than the number looking to sell. AURIS Finance’s experts, specialised by sector, can assist you throughout your acquisition or sale transaction.

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