HelpSystems Acquires Tripwire
- Transaction Value: $350 M
- Enterprise Value / Revenue: 3.3x
- Enterprise Value / EBITDA: 87.7x
- On February 9, 2022, HelpSystems announced it would acquire Tripwire, Inc, from Belden Inc. (NYSE: BDC) for $350 million. Belden had originally acquired TripWire from Thoma Bravo for $710 million in December 2014. Thoma Bravo had acquired Tripwire in 2011 after Tripwire, filed to raise $86M through an IPO in 2010.
- Tripwire is a Portland-based software company that specializes in cybersecurity and compliance solutions for enterprise service providers, and government agencies.
- HelpSystems improves upon their existing IT security service namely by passing on Tripwire’s file integrity monitoring benefits to existing global customers.
TBP’s Analysis of Growth Drivers in Cybersecurity
- The rapid implementation of remote work during the pandemic resulted in mass data consolidation susceptible to breaches, with targeted companies having technical and architectural vulnerabilities.
- The number of major breaches compromising the security, confidentiality, and integrity of sensitive company data increased year-over-year in every major non-Military sector; more than doubling in Financial Services, Education, Transportation, and Manufacturing & Utilities
- The average cost for resolving data breaches rose from $3.86M in 2020 to $4.24M in 2021, with global cybercrime costs increasing from $3T in 2015 to $6T in 2021. (Source: CISO Mag)
- Comprehensive state privacy laws are increasingly reaching their effective dates, requiring the implementation of reasonable data security measures in for-profit entities.
- As a result of increasing costs to business and productivity, the global cybersecurity industry is anticipated to grow at a compound annual growth rate of 12% from $165.8 B to $336.1 B by 2028. (Source: Fortune Business Insights)
TBP’s Analysis of HelpSystems Growth via Acquisition
In recent acquisitions, HelpSystems has obtained unique players in the cybersecurity space to integrate numerous security and protection services into their existing B2B product:
- Digital Defense (Feb 2021), a leader in vulnerability management and threat assessment solutions.
- Beyond Security (May 2021), network vulnerability scanning software.
- Agari Data (May 2021), is a leader in protecting against email threats and compromise.
- Phish Labs (Oct 2021), cyber threat intelligence company mitigating digital risks.
- Digital Guardian (Oct 2021), SaaS provider of data loss prevention for mid & large-sized organizations.
TBP’s Analysis of Strategic and Financial Sponsors Interest in Cybersecurity Space
- The deal volume in Cybersecurity M&A increased at record rates in 2021, with $77.8 billion in the calendar year, a 338% increase from 2020. (Source: TechCrunch)
- PE+VC investment also increased in the sector from $10.7B to $29.3B in the aforementioned period.
- TBP anticipates a continuation of this trend in 2022, with M&A in the sector remaining very active to begin the year.
- Given the sector’s expanding demand and potential use case, target valuations have increased with the rise in deal volume.
Relevant M&A Transactions Within Cybersecurity Space in 2022
True Blue Partners is a boutique M&A advisory firm that serves lower mid-market enterprise software, service and solutions companies. It brings the rigorous strategic and financial perspective of bulge bracket firms with a company building approach and a steadfast partnership that only an independent boutique firm can deliver. For more information please visit www.truebluepartners.com or email us at firstname.lastname@example.org.