US arms maker Raytheon is buying network security provider Websense from private equity firm Vista Equity Partners in a $1.9 billion deal, the latest in the fast-growing cyber security market.
Several companies, including Sony, Staples, Home Depot and Target, have been targets of high-profile data thefts over the past two years.
"We're seeing an exponential increase in the number of attacks by ultra-sophisticated attackers," Raytheon chief executive Thomas Kennedy told Reuters. "It is the combination of those two that is leading to an explosion in the cyber security area."
A cyber attack in mid-2014 at the US Investigations Services, which performs background checks for US government employees, compromised data of at least 25 000 workers, including some undercover investigators.
The Websense deal will add more than 20 000 commercial customers to Raytheon's portfolio of predominantly government clients.
"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," FBR Capital Markets analyst Daniel Ives wrote in a note.
The global cyber security market is estimated to jump to about $156 billion in 2019 from $96 billion in 2014, according to research firm MarketsandMarkets.
Bain Capital agreed last month to buy network security company Blue Coat Systems in deal that valued the company at about $2.4 billion, including debt.
Raytheon, which is paying about $1.6 billion including debt for Websense, said it would combine its cyber security unit with the company. The deal is valued at $1.9 billion, net of cash.
Vista will then invest about $335 million for a nearly 20% equity stake in the new company, Raytheon said yesterday.
The new company, which will be headed by Websense CEO John McCormack, will be a separately reported business unit, Raytheon said.
A board of directors will be formed for the new company and will include representatives of both Raytheon and Vista, the company said.
Share