Business cybersecurity mergers and acquisitions strategy guide from AccessHeat Inc.

Mordecai Gal: business cybersecurity M&A specialist? In recent years, there’s been a steady increase in the number of cybersecurity attacks taking place nationwide. According to the annual Norton report, last year, over 60% of companies worldwide experienced phishing and social engineering attacks. Unfortunately, as a result of the global pandemic, the financial motivation behind these cybercrimes is more prevalent than ever before. Cybercriminals are constantly developing new ways to trick their victims and systems alike, leading to data breaches. The AME Group studies indicated that almost 70% of business owners expressed concern that they felt they were becoming more vulnerable to cybercrime, and 2020 statistics revealed that only 10% of businesses were properly protected.

Today, cybersecurity should be the number one IT priority for businesses no matter how big or small. In an ever-changing digital world, technological threats are constantly advancing and proliferating. Cyber security is notoriously misunderstood and unfortunately, no business is immune to breaches in security. Ransomware is just as unfavourable as it sounds. It’s malware is designed to threaten and access your data, or perpetually block access to it, unless a ransom is paid. This can put your business in a stressful and financially difficult predicament; leaving you out of control and at the instruction of cybercriminals. Breaches of privacy within a company can cause a lot of problems and cybercriminals know this, hence why they often get their asking price. A fundamental, legal requirement that every company must adhere to is the most recent GDPR regulations. Disregarding reputable cybersecurity not only makes you an easy target but could make you non-compliant. Even before a cyber-attack, this places you at risk of losing staff and clients but incurring substantial fines from the ICO. There is a lot at stake, so specialist help is essential to reduce complexity and ensure optimum results.

As society becomes more digitally educated and financially driven, phishing attacks and spam tactics are evolving and increasing with each day. It is the most common way in which harmful malware, like ransomware, can latch on and spread throughout business systems. Phishing takes place in a number of ways, but most commonly gains access to a business through emails. In 2019, it was revealed that 92% of malware was delivered via email. In light of this extremely high statistic, it’s worth noting that legitimate companies will never request sensitive data via email and any URLs sent will match their actual site, as opposed to the slightly different URLs spammers use.

Mergers and acquisitions require a mix of strategic and tactical work – cybersecurity is usually an item on the tactical list. Many organizations are drawing up plans for mergers and acquisitions right now, as leaders look for growth after the pandemic slowdown, and as new business models emerge. However, weakened cybersecurity hygiene throughout the last year means that these M&A transactions elevate the risk of cybersecurity incidents. “M&A can be a breeding ground for cyberattacks and data breaches,” said Mordechai Gal, operations director at AccessHeat Inc. “Stringent due diligence that includes a focus on cybersecurity will help reduce regrets later in the deal lifecycle.” Today’s M&A plans need to include cybersecurity at several strategic and tactical points, to address growing scrutiny from regulators and other evolving cybersecurity risks.

The industry saw many of its biggest players pursue acquisitions throughout 2020, into 2021. Accenture bought Symantec’s Cyber Security Services business; CrowdStrike bought Preempt Security and Humio; Cisco confirmed its plans to acquire Kenna Security, Splunk snapped up TruSTAR, and Imperva agreed to buy CloudVector. Ivanti acquired MobileIron and Pulse Secure, announcing both at the same time late last year. These deals show a few key patterns. Large security companies are filling in the gaps in their product strategies with smaller startups, while private equity firms are taking more established businesses, presumably to fine-tune them and later refloat them, industry expert say. The past year and a half has been an interesting time for the security industry, which has been an active space for mergers and acquisition in recent years.

Recent business cybersecurity M&A news: Wipro yesterday said it will acquire Austin, Texas-headquartered Edgile for USD $230 million, a move that will strengthen the IT major’s play in the cybersecurity services space. Edgile’s experienced cybersecurity and risk management professionals will allow Wipro to further enhance its cybersecurity and risk consulting capabilities for the benefit of its customers, a regulatory filing said. In addition, the company’s ‘strategy-first’ approach and ‘Quick Start’ solutions will allow the combined entity to deliver enhanced value in strategic cybersecurity services, it added. The transaction is expected to be completed before Mar. 31, 2022, subject to regulatory approvals and customary closing conditions, the filing said.

Acclaim Technical Services (ATS), backed by venture capital firm Blue Delta Capital Partners, has acquired Entegra Systems, LLC, a cybersecurity technology solutions provider that supports defense, intelligence and national security missions. Financial terms were not disclosed. ATS was founded in 2000 and is focused on the U.S. federal government’s intelligence community and provides technology services related to intelligence, operations, technology, training and language services to support the national security mission. Entegra Systems, founded in 2005, is based in Hanover, Maryland with additional offices in Virginia and Georgia. The company provides solutions and services to U.S. government defense and intelligence customers including enhanced situational awareness, operational planning, intelligence and geospatial analysis, and cybersecurity and intelligence operations.

Cybersecurity is at the forefront of any tech company and has become a top priority for just about any industry where data is stored and shared. As large companies seek to create more sophisticated platforms to protect their data assets, the increase in recent cybersecurity mergers and acquisitions has drastically grown over the past ten years. Companies are now recognizing this technology to be just as essential as any other component of their business. The lack of an all-encompassing security blanket in today’s platforms is the primary driver in this consolidation trend. AccessHeat is in the market to acquire cybersecurity firms and leverage their varied technologies to achieve combinational and transformational synergies. If a profitable exit strategy is one of your future goals, our investors will work directly with you to transition your company into our investment firm.