The shift to remote work has seen a major increase in malware, ransomware, and other malicious attacks that keep cybersecurity firms thriving. As a result, the market has seen a major increase in cybersecurity M&A activity. And it doesn’t show signs of stopping.
Virtually Bullet-Proof During a Recession
As a whole, the cybersecurity industry has been largely unaffected by the rockiness of our economy. Its success can be attributed to several factors, including:
- As cloud adoption continues to accelerate, more organizations are being exposed to more risks and require added security.
- Many companies have transitioned their operations to digital platforms in recent years, which has required them to greatly expand their cybersecurity investment.
- The cybersecurity industry has seen a growing trend in proactive security technologies, as opposed to the more reactive solutions of the past.
Combine all these factors and you get a red-hot cybersecurity market that continues to take the M&A world by storm.
M&A Activity Overview
After a record-breaking 2021, cybersecurity dealmaking remained strong in 2022. While Google’s $5.4 billion acquisition of Madiant in March may have grabbed the largest headlines, there has been a massive amount of mid-market deal activity across the entire space.
And while activity did take a dip in 3Q 2022, it was still robust with 221 companies raising $3.3 billion and 104 M&A deals closing at disclosed value of $11.7 billion.
All in all, a large number of cybersecurity companies are still valued well above market averages and M&A volumes and values continue to outpace those in most sectors.
Private Equity Firms Are Betting Big on Cybersecurity
Business owners looking to secure funding or sell their cybersecurity firms have found themselves in the perfect storm. With many large enterprises and private equity firms currently engaging in high-volume programmatic acquisitions of cybersecurity companies, successful businesses who offer managed security services and compliance solutions are in exceptionally high demand.
There Has Likely Never Been a Better Time to Sell
If you own a successful cybersecurity business, and you’re considering selling or raising capital for your organization, the M&A advisors at Hyde Park Capital can help you achieve maximum value. For over 20 years, our firm has earned a stellar reputation as highly competent and ethical investment bankers who help optimize the value of mid-market technology companies.
Our Tech Experience Runs Deep
Before co-founding the company, Hyde Park Capital Senior Managing Director John Hill served nine years as the Technology Group Head at Raymond James. Experience matters, and no one knows this space better than us. Private equity investors are out there right now looking to acquire the right kind of cybersecurity company—and we know who they are.
Let’s Start the Conversation
If you’d like to dig deeper into our cybersecurity M&A outlook and discuss your goals, Hyde Park Capital specialist Josh Mastracci is eager to help. Give him a call today at 813-383-0202, or contact us via our website. We’d love to put our M&A services, expertise, and experience to work for you.
