5 Major Security Vendors That Could Be Acquired By Private Equity

5 Major Security Vendors That Could Be Acquired By Private Equity


Reports suggest that well-known cybersecurity vendors including Tenable, eSentire and Trend Micro are seeking to be acquired.


Buyers Wanted

The list of major cybersecurity vendors that are reportedly pursuing an acquisition by private equity investors—or are facing pressure to do so—is continuing to grow.

Following recent reports that top security vendors including Tenable and Trend Micro are seeking to be acquired, Reuters reported last week that eSentire, a leading provider of managed detection and response (MDR), is considering a sale to a different private equity firm. The company is already backed by private equity.

[Related: The 20 Coolest Endpoint And Managed Security Companies Of 2024]

Recent years have seen numerous publicly traded cybersecurity vendors taken private through deals with private equity investors, including KnowBe4, Proofpoint, SailPoint and Ping Identity. Earlier this year, Thoma Bravo said it had reached a deal to acquire Darktrace for $5.32 billion.

Meanwhile, the challenging conditions for initial public offerings have constrained newer cybersecurity vendors from going public. Data security platform provider Rubrik, which completed its IPO in April, is the sole cybersecurity vendor that has gone public since late 2021.

What follows are the details on five major security vendors that could be acquired by private equity.


eSentire

Reuters reported on Aug. 13 that eSentire and its owners are considering whether to pursue an acquisition by a different investor or set of investors. The potential acquisition could amount to roughly $1 billion, and eSentire has engaged with investment bank Evercore on the possible sale process, according to the report.

CRN reached out to eSentire for comment Wednesday.

Current backers of eSentire are private equity firm Warburg Pincus, venture capital firm Georgian and pension fund CDPQ, according to the Reuters report.

In February 2022, eSentire raised $325 million at a valuation of more than $1 billion from CDPQ and Georgian.

Named a “Strong Performer” in a mid-2023 Forrester Wave ranking for MDR, eSentire’s moves have continued the evolution of the company from an MSSP into an MDR platform vendor. The efforts have led eSentire to generate an increasing percentage of its business through the channel, Bob Layton, the company’s chief channel officer, told CRN in 2023. In many cases now, when it comes to MSP or MSSP firms that are delivering services to customers, “it’s eSentire under the hood,” Layton (pictured) said at the time.


Trend Micro

Earlier this month, Reuters reported that cybersecurity giant Trend Micro is exploring an acquisition deal by potential buyers including private equity investors.

CRN reached out to Trend Micro for comment Wednesday.

According to the Reuters report, Trend Micro is considering a sale either to a private equity firm or another investor. The deliberations come after the cybersecurity vendor found “buyout interest,” as well as a decline in the company’s stock price and a recent weakening in the value of the yen, the report said. Trend Micro is based in Tokyo.

Citing unnamed sources, Reuters reported that Trend Micro has begun engaging with investment banks to assist with the process.

In October, Trend Micro announced a major step in its efforts to help enable the channel to deliver more services around its Vision One cybersecurity platform with the launch of a redesigned partner program that added new competencies, assessments and discounts for partners.

The updates have come as Trend Micro continues to expand the capabilities on Vision One, its unified cybersecurity platform for threat detection, response and prevention.


Tenable

According to a Bloomberg report in late July, publicly traded Tenable is considering a sale either to a private equity firm or to a “strategic” buyer. The process is still in its “early stages,” the report said. Citing unnamed sources, Bloomberg reported that Tenable has brought aboard advisers to assist with the process.

Tenable declined to comment Wednesday.

The reported deliberations by Tenable come after the company has continued to expand its exposure management platform, Tenable One, both through organic product additions and startup acquisitions. In June, Tenable said it had reached a deal to acquire Eureka Security, a startup focused on providing data security posture management (DSPM) for the cloud.

The DSPM capabilities have joined the Tenable platform that already offers cloud security posture management (CSPM), cloud workload protection and CIEM (cloud infrastructure entitlement management). Tenable has assembled some of these capabilities through previous M&A, including the $265 million acquisition of Ermetic last fall.


Rapid7

Publicly traded Rapid7 has reportedly been facing pressure from an activist investor to prompt a sale of the company, according to a report from the Wall Street Journal in late June.

Investment firm Jana Partners disclosed at the time that it had obtained a major stake in Rapid7 with the goal of forcing the vendor to be taken private, via an acquisition by private equity, according to the report.

Rapid7 declined to comment Wednesday. CRN reached out to Jana Partners for comment.

In February 2023, Reuters reported that Rapid7 was considering its options for being acquired, with the possibilities including a sale to private equity investors.

The company had been approached by investors, including some from private equity firms, and was working with Goldman Sachs Group at the time to explore its options, according to the early 2023 report.

Rapid7 offers a number of different security tools, including extended detection and response (XDR) and security information and event management (SIEM), which are used by security operations teams to pinpoint threats amid the massive amount of security data that is generated by today’s IT systems.


N-able

In May, Reuters reported that N-able had been exploring a possible sale after “attracting acquisition interest.” Sources familiar with the matter told Reuters that the publicly traded security and software vendor was participating in a sale process that could attract a deal with a private equity firm.

CRN reached out to N-able for comment Wednesday.

One such company that was reportedly eyeing N-able was Barracuda Networks, according to Reuters. Barracuda is owned by PE firm KKR after being acquired by PE firm Thoma Bravo for about $4 billion in 2022. Barracuda declined to comment.

In 2021, N-able went public after spinning out from software firm SolarWinds, which had been acquired by Silver Lake and Thoma Bravo for $4.5 billion in 2016.



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Reports suggest that well-known cybersecurity vendors including Tenable, eSentire and Trend Micro are seeking to be acquired. Buyers Wanted The list of major cybersecurity vendors that are reportedly pursuing an acquisition by private equity investors—or are facing pressure to do so—is continuing to grow. Following recent reports that top security vendors including Tenable and Trend…

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