S&P Analysis: Private Equity Wades Into Cybersecurity Subsector Consolidation

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Global private equity and venture capital transactions in the identity and access management sector amounted to $12.37 billion across 77 deals in the year to Aug. 12, according to data and analysis from S&P Global Market Intelligence.

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In the larger security industry, a lot of companies are prime targets for private equity, said Garrett Bekker, principal research analyst at 451 Research. “By our count, there’s probably about 4,000 security vendors. There are maybe at least several hundred identity and access management vendors. … If we look at the various sectors of cybersecurity that have been most active in terms of M&A, identity and access management has been in the top three for at least the past five years, if not number one.”


Other highlights from the analysis include: 

  • The year-to-date value and volume of private equity-backed deals do not appear to be on track to match 2021’s $34.44 billion, which was driven by McAfee Corp.’s sale to a group of private equity investors for about $12 billion in cash, excluding debt.
  • Total M&A in the subsector is forecast to surpass the 2021 level, with strategic acquisitions expected to more than make up for the drop in private equity acquisitions. Private equity-backed transactions fell to roughly 20% of total M&A so far in 2022, compared to over a third, even going as high as up to 38%, in the past few years, said Garrett Bekker, principal research analyst at 451 Research.

The full analysis can be found here: Private equity wades into cybersecurity subsector consolidation | S&P Global Market Intelligence (spglobal.com)