With a growing reliance on technology, it does not come as much of a surprise that the importance of cybersecurity is increasing as well. In its Mid-year Market Review, Momentum Cyber reported that $2.3 billion had already been lost as a result of cryptocurrency breaches. This staggering loss may be one of the many reasons why there is a greater focus on cybersecurity and why the number of mergers and acquisitions ("M&A") in the cybersecurity sector has been rising. It was even predicted in August 2018 that this would be a record year for the industry.

This prediction is evidenced by Blackberry's recent announcement that it intends to purchase Cylance for $1.4 billion in cash. Cylance creates software that is aimed to prevent cyberattacks from occurring on internet-connected devices, such as cell phones and tablets. This acquisition is not the first cybersecurity acquisition for the company. In 2015, Blackberry also purchased Good Technology, a company that specializes in enterprise mobile security products.

Blackberry is not the only company contributing to the recent spike in cybersecurity M&A activity. In August 2018, Cisco announced that it would be acquiring Duo Security for $2.35 billion and only earlier this month, Thoma Brava announced that it would purchase the software security firm Veracode, for $950 million. In the first half of 2018, 101 cybersecurity M&A deals had been reported, resulting in an 11% increase year-over-year.

Reasons for the growing interest in cybersecurity include:

  • An increase in investment opportunities;
  • Further innovation, revealing the need for greater cybersecurity; and
  • The heightened need for confidentiality and anonymity on the internet.

As the end of the year approaches, we will soon learn whether 2018 is in fact a record year for cybersecurity M&A. Moreover, given the importance of cybersecurity and recent acquisitions within the industry, it is likely that the upward trend of cybersecurity M&A activity will persist in 2019.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

Law around the world

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.