Cyber Companies Attracting All-Time High M&A Appetite

Capstone Partners’ Cybersecurity Practice Closes a String of High-Profile Strategic Transactions.

Denver, Los Angeles, and Boston – Capstone Partners, a leading middle-market investment banking firm, reports increased demand for growth-oriented, emerging cybersecurity companies after completing four notable transactions in the sector during the second half of 2021.

According to Capstone, Cybersecurity deal activity has been dominated by strategic acquirers able to rapidly leverage key value drivers, which often helped them win out over their competitive private equity counterparts. Recent deals closed by Capstone’s Cybersecurity M&A practice and the strategic rationale include:

• The acquisition of Bricata by an undisclosed strategic buyer (November 2021) – Venture-capital-backed Bricata offered a proprietary Network Detection and Response (NDR) software platform.
• The acquisition of Cygilant by SilverSky (December 2021) – Cygilant expanded SilverSky’s global security-operations-center (SOC) capabilities and opened new market opportunities.
• The acquisition of COVAIL by GoSecure (December 2021) – COVAIL offered GoSecure a US presence and platform to build out an AI-powered managed services offering.
• The acquisition of VirtualArmour by Evergreen Services Group (July 2021) – VirtualArmour was acquired by managed services industry consolidator Evergreen Services to enhance their cybersecurity capabilities.

“Tom McConnell and David Brinkley, who co-head our Cybersecurity group, are delivering tremendous value to our clients because they are intimate with the competitive dynamics of the ever-evolving sector as well as each active strategic acquirer”, commented John Ferrara, Capstone’s founder and CEO. Ferrara added, “The team brings deep industry knowledge, real-time access to key market participants, and flawless execution. The results their clients are achieving in these transactions are among the best in the sector.”

We see strategic buyer appetite for quality assets at an all-time high. However, each client must be appropriately positioned to match the specific criteria of the strategic buyer. By understanding our client’s intrinsic value proposition relative to the active strategic buyer’s, we are capturing valuation premiums well above the financial statements. While each of these transactions came together for different reasons, all of the stakeholders achieved extraordinary outcomes.

Tom McConnellManaging Director, Capstone Partners

Capstone Managing Director David Brinkley added, “We are privileged to have represented four extraordinary companies that are transforming the technological landscape for cybersecurity solutions. We are pleased to have worked with superb counterparties in each transaction. Capstone’s expanding Cybersecurity team is dedicated to assisting middle market firms accelerate growth and maximize shareholder value through capital solutions optimized for this highly specialized market.”

With the conclusion of another successful year, Capstone Partners’ reputation as a trusted advisor to owners and shareholders of privately held, publicly traded, private-equity-controlled, and venture-capital-backed companies continues to grow.

ABOUT CAPSTONE PARTNERS

Capstone Partners is one of the largest independently owned investment banking firms in the United States. For over 20 years, the firm has been a trusted advisor to leading middle market companies, offering a fully integrated range of expert investment banking and financial advisory services uniquely tailored to help owners, investors, and creditors through each stage of the company’s lifecycle. Capstone’s services include M&A advisory, debt and equity placement, corporate restructuring, special situations, valuation and fairness opinions, and financial advisory services. Headquartered in Boston, the firm has 175+ professionals across the U.S. and an international presence including over 450 professionals in 43 countries. With 12 dedicated industry groups, Capstone delivers sector-specific expertise through large, cross-functional teams on a global basis. For more information, visit www.capstonepartners.com.

FOR MORE INFORMATION CONTACT:

David Brinkley
Managing Director
Cybersecurity Practice
(917)817-0375
dbrinkley@capstonepartners.com

Thomas McConnell
Managing Director
Cybersecurity Practice
(303)886-2279
tmcconnell@capstonepartners.com

###