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Despite the COVID-19 pandemic, cybersecurity mergers and acquisitions this year are on pace with 2019, although it seems there is less appetite to spend big. The 10 largest deals in 2019 totaled over $30 billion, whereas the top ten in 2020 have totaled about $13 billion. The largest deal in 2020 is less than half the size of the largest in 2019. Private equity firms continue to have a large presence in the biggest acquisitions.

“We’ve yet to see what is the complete fallout from COVID-19,” says Henrik Jeberg, director at M&A advisory firm Hampleton Partners, “but what we typically see in downturns is that volume in terms of deals are typically not that effected, but the valuations are often going down.”

“For cybersecurity specifically I would say it’s probably been on par with what we’ve expected. We saw some really big deals last year and obviously those guys are not going to trade again anytime soon. We’ve seen a number of deals above $1 billion but not that many,” says Jeberg.

Consolidation is what has prompted interest in the cybersecurity market among PE, says Jeberg. “A PE fund is not going to buy a $10 million company; that’s not their game. [Due to consolidation], these companies have become so big and so profitable and with so much potential that they are becoming increasingly interesting to PE funds. If you go back ten years ago there weren’t really a lot of cybersecurity companies around that would that would fit the bill for for these large PE funds.”

Jeberg likens the cybersecurity market to the wider enterprise software market in recent years where there’s been a lot of consolidation in areas such as CRM and BI that is often driven by customer demand. “Security needs to be something that covers from A to Z a lot of CISOs are daunted by piecing together the full suite of products from 10 different vendors,” he says. “I think that that is a trend that’s driving a lot of these acquisitions: demand from customers for their vendors to present a full security suite.”

Here are the 10 largest cybersecurity M&A deals in 2020 so far:

Original article source was posted here

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