US defense contractor Raytheon Co is acquiring the security provider Websense Inc from private equity firm Vista Equity Partners LLC in a $1.9 billion deal.
Over the past few years several large multinational companies have experienced high-profile data thefts, including Sony, Target, and Staples.
FBR Capital Markets analyst Daniel Ives wrote in a note:
“This acquisition highlights the massive investments being allocated toward this high-priority area of IT spending as enterprises of all shapes and sizes look to bulk up legacy security systems with next-generation technologies,”
The deal will add over 20,000 new customers to Raytheon’s portfolio of clients.
As part of the transaction, Raytheon will contribute $1.9 billion (net of cash acquired) to acquire Websense, of which $600 million will be in the form of an intercompany loan to the joint venture.
According to research firm MarketsandMarkets, the global cybersecurity market is forecast to surge to around $156 billion in 2019 from $96 billion in 2014.
Thomas A. Kennedy, Raytheon Company Chairman and CEO, said:
“The market for advanced cyber solutions that protect and defend global industry and infrastructure is rapidly growing due to the sophisticated threats posed by well-funded, nation-state adversaries and criminal networks. As the business enterprise evolves to meet the networked demands of today’s mobile and cloud economy, these threats will grow in size and scale.”
Adding:
”The new joint venture will combine Raytheon Cyber Products and Websense capabilities to deliver the advanced, defense-grade technology solutions needed to meet this evolving threat.
“We believe the combination of Raytheon Cyber Products and Websense creates a strong foundation for growth in the cybersecurity market, especially in light of the combined technical, product and multi-channel strengths each brings to the table,” said Brian Sheth, Co-founder and President of Vista Equity Partners.
We are excited to invest in this new venture as we clearly see its ability to accelerate growth and create value for all parties.”
John R. McCormack, CEO of Websense, commented:
“As a cybersecurity market leader, Websense provides a proven technology platform, a team with depth and breadth of industry experience, over 21,000 customers, and a delivery channel of over 2,200 partners.
“The opportunity to provide our growing customer base with Raytheon’s patented technology positions us to serve customers as they manage the emerging and long-term cyber threat environment.”