The 10 Biggest Security Acquisitions Of 2017 (So Far)

The Frenzied Security M&A Market

The security M&A market is alive and well as more companies look to get into security, and those already in the space look to double down. Some of the year's biggest acquisitions so far include two blockbuster solution provider acquisitions, as well as vendors looking to increase their capabilities around analytics, automation, application security, machine learning and more. However, while M&A was healthy in the first half of the year – with many notable deals – industry analysts and influencers still predict an upcoming wave of security market consolidation to come. As we head into the second half of the year, take a look back at some of the biggest security acquisitions from the year so far.

(For more on the "coolest" of 2017, check out "CRN's Tech Midyear In Review.")

10. Kudelski Group Acquires M&S Technologies

In one of the bigger security VAR consolidation events of the year so far, the Kudelski Group said in January that it had acquired M&S Technologies. The Dallas-based company, No. 33 on the 2017 CRN Solution Provider 500 and one of the top three pure-play cybersecurity solution providers in the country. M&S, which has 46 employees, a slew of Fortune 2000 customers and key security partnerships with McAfee, Juniper Networks, Fortinet and Sophos, provides Kudelski with critical scale as it moves to become a dominant player in the U.S. and throughout the world. Terms of the deal were not disclosed.

9. IBM Acquires Agile 3 Solutions

IBM continued its security acquisition spree in January with the acquisition of Agile 3 Solutions, which offers software to help senior business executives understand and mitigate the risks of data breaches to their organizations through visualization and analytics. Agile 3 was founded by an IBM veteran. IBM said the technology would be brought to market through IBM Data Security Services and integrated into IBM Guardium. IBM also said it planned to acquire Ravy Technologies, which OEMs dashboards used in the Agile 3 product line.

8. Forcepoint Acquires Skyfence From Imperva

Forcepoint is looking to bring a new approach to platform security, with a focus on intellectual property and asset protection instead of on securing infrastructure and looking for events that lead to a security incident. Forcepoint expanded that vision in February, with the acquisition of Skyfence from Imperva. Skyfence was the cloud access security brokerage division of Imperva. CEO Matt Moynahan said at the time that the acquisition will extend Forcepoint's strategy to protect IP and assets to the cloud, integrating Skyfence's technology with its own web security and DLP technologies. Terms of the deal were not disclosed.

7. Microsoft Acquires Hexadite

After weeks of rumors of a deal in the works, Microsoft said in June that it had acquired security orchestration and automation company Hexadite. Reports put the price of the deal at $100 million. Exadite's platform uses artificial intelligence technologies to investigate and respond to security alerts. The company's investors include Hewlett Packard Enterprise, TenEleven and YL Ventures, with its most recent funding coming from an $8 million Series A round in February 2016. Microsoft said the acquisition will help improve detection and response to attacks for commercial Windows 10 users. Hexadite's AI-based technology will be added into Microsoft's Windows Defender Advanced Threat Protection, the company said. Sources told CRN after the announcement that Microsoft had cut most of the U.S.-based staff of Hexadite, including its channel chief.

6. Sophos Acquires Invincea

Sophos boosted its next-generation endpoint security and platform capabilities in a big way in February, saying it had entered into an agreement to acquire Invincea. The deal was worth $100 million in cash, with a $20 million earn-out. Invincea, Fairfax, Va., uses machine learning and deep learning neural-network algorithms to detect unknown malware without the use of signatures. Executives at the time told CRN that the acquisition added key machine-learning capabilities and data architectures to the company's growing endpoint security portfolio. Sophos Vice President of Global Channels Kendra Krause said in an interview at the time that the acquisition fills out the company's security platform and helps expand partners' next-generation endpoint security capabilities. The security vendor completed the acquisition in March.

5. Hewlett Packard Enterprise Acquires Niara

HPE unveiled in February its plan to acquire security analytics and network forensics software provider Niara. Niara's behavioral analytics software automates the detection of attacks and risky behaviors inside an organization and dramatically reduces the time and skill needed for security teams to investigate and respond to security events. HPE said that the Niara acquisition would add to its Aruba ClearPass network security portfolio for wired and wireless network infrastructure, adding key capabilities around next-generation behavioral analytics, visibility and attack detection. Partners said the acquisition will allow HPE to compete better against Cisco, saying it adds more security capabilities to the edge of the network, an area in which partners said Cisco is "most vulnerable."

4. Palo Alto Networks Acquires LightCyber

Palo Alto Networks dived into the hot market for behavioral analytics in February, unveiling its acquisition of Israeli security startup LightCyber. The deal was worth $105 million. LightCyber's breach-detection and remediation offering is called Active Breach Detection. The company's offering uses behavioral analytics and anomaly detection to gain visibility into advanced and targeted attacks, insider threats, and attacks that have gone around traditional controls. CEO Mark McLaughlin said in a statement at the time that LightCyber's technology would "complement the existing automated threat prevention capabilities of our platform to help organizations not only improve but also scale their security protections to prevent cyberbreaches."

"The LightCyber team's vision to bring automation and machine learning to bear in addressing the very difficult task of identifying otherwise undetected and often very sophisticated attacks inside the network is well-aligned with our platform approach," McLaughlin said.

3. CA Technologies Acquires Veracode

CA Technologies struck a deal in March to acquire application security company Veracode for $614 million in cash. Burlington, Mass.-based Veracode offered a cloud-based, secure DevOps platform for securing web, mobile and third-party enterprise applications throughout the software development life cycle. CA said the acquisition would allow it to expand its security portfolio around DevOps and IT management technologies.

"Software is at the heart of every company's digital transformation. Therefore, it's increasingly important for them to integrate security at the start of their development processes, so they can respond to market opportunities in a secure manner," said Ayman Sayed, CA's president and chief product officer, in a statement at the time. CA said it expects the acquisition to close in the first quarter of fiscal 2018.

Veracode had been widely expected to go public back in 2015, but the company had remained private. At its last funding round – a $40 million Series F round in 2014 – the company was valued at approximately $800 million.

2. KKR & Co. Acquires Optiv Security

While it was first announced at the end of last year, Optiv Security closed its blockbuster acquisition by KKR & Co. in February of this year. The deal was worth an estimated $2 billion and CEO Dan Burns said the move will allow the security solution provider to better set its sights on the global security market. He said it will also allow Optiv to invest in emerging security areas like cloud security. In a statement about the closing of the acquisition, Burns said the deal will allow Optiv to be the "world's most advanced, most comprehensive and most trusted partner for cybersecurity solutions."

Optiv followed up its acquisition by making an acquisition of its own, saying in March that it had bought network and security solution provider Comm Solutions to further expand its presence in the Northeast market.

1. TPG Capital Acquires Intel Security (Now McAfee)

While it was announced late last year, McAfee officially closed on its blockbuster split from Intel in April 2017. With the closing of the deal McAfee – formerly known as Intel Security – once again became a $2 billion stand-alone security vendor for the first time since its $7.7 billion sale to Intel in 2010. The split involves the sale of a 51 percent stake of the McAfee to TPG Capital. The deal is worth $4.2 billion, including $3.1 billion in cash to Intel and a $1.1 billion equity investment by TPG. The company is led by CEO Chris Young, who had previously served as senior vice president and general manager of Intel Security. In an interview with CRN at the time, Young said the transaction to make McAfee independent is a significant milestone in the company's journey to be its customers' "No. 1 security vendor." He said partners can expect to see investments in innovation and potentially even some acquisitions.