January 15, 2025 – Solganick has issued its latest mergers and acquisitions (M&A) update for the Cybersecurity industry sector, covering Q4 2024 and a 2025 outlook.
You can download the complete report here: Solganick Cybersecurity Mergers Update – Q4 2024
The following summary highlights the report including the current cybersecurity M&A climate that Solganick views as an uptick in deal activity.
M&A transaction activity for cybersecurity companies in Q4 2024 jumped substantially over the previous quarter and the prior year, matching the highest quarterly volume in the past three years. Financial buyers were significantly more active in Q4 2024 over the previous quarter (13 versus 3), a healthy rebound from recent levels.
We expect strengthening M&A activity over the next 12 months, driven by ongoing strategic consolidation and escalating cyber risks from AI-powered attacks. Additional rate cuts by the Fed in 2025 could further accelerate activity by financial buyers, including both platform investments and add-ons.
Security Operations constituted the largest sub-sector of M&A activity (excluding consulting services), with several notable transactions integrating complementary capabilities (e.g., XDR, EDR) into acquirers’ platforms and capitalizing on synergistic customer and geographic expansion.
Risk Management, Infrastructure, and Identity were other key sub-sectors of M&A activity. Identity acquirers are increasingly looking to offer comprehensive and more efficient coverage of end-customers’ on-premises and cloud environments, given legacy deployments of siloed identity solutions.
Valuation multiples for publicly-traded cybersecurity companies ranged from a median of 14.3x EV/2024E revenue for high growth (>20%) vendors to a median of 4.7x EV/2024E revenue for low growth (<10%) vendors, a substantially wider divergence than in the previous quarter.
Cybersecurity M&A Deal Volume, Q1 2022 – Q4 2024
The report covers recent M&A transactions announced, an industry landscape, public comparables, and a valuation table for the cybersecurity industry.
Solganick Cybersecurity Mergers Update – Q4 2024
For more information or to inquire about an M&A opportunity within the Cybersecurity sector, please contact Michael Kim – Director of Cybersecurity M&A, Solganick & Co. at: [email protected]
