Market Update: Cybersecurity & Infrastructure Services Q3 2022
In Q3 of 2022, the Cybersecurity & Infrastructure Services industry saw nearly $15.0 billion of capital deployed globally for M&A and Buyout/LBO transactions. Additionally, the quarter also saw 99 deals take place across a bevy of sub-sectors, including primarily network management software, IT consulting and outsourcing, and business/productivity software. The majority of these transactions took place in the U.S., specifically San Francisco, and Austin, and other leading regions include Dubai, Canada, Italy, and Germany. Geographically, this composition has stayed in line with historic trends.
Industry Challenges and Trends
Cloud Security. It has become a requirement for modern-day enterprises and SMBs to move their data to the cloud. There are still considerable drawbacks for specific industries with more sensitive data sets, as the majority of cloud providers do not offer encryption or authentication as security measures. There is an urgent need to enhance cloud security capabilities, with innovative measures currently being introduced today that will likely extend to 2023 to combat cyber threats.
Attacks on Healthcare Companies. Certain sectors are especially vulnerable to cyber attacks given the massive amounts and types of information and data they deal with. As the financial sector is notoriously known for frequent cyber attacks, so is healthcare, which is expected to be increasingly under threat in H2 2022 and 2023. Alarmingly, since 2009, the number of cyber attacks on U.S. healthcare businesses has increased from 18 to 713 per year.
User Awareness. Cybersecurity threats are continuing to become more and more prevalent each year. Businesses of all sizes are increasingly dedicating a greater portion of their IT budget on cybersecurity-related upgrades, enhancements, and trainings. Notably, there is a growing move towards security awareness training as many cyber attacks are directly caused by human error rather than a breakdown in digital security measures. As humans became more aware of phishing attacks and spoofing scams, password strengths improve, and companies routinely encourage basic cyber health advice, H2 2022 and 2023 cyber attacks could be greatly prevented.
7MA has completed numerous M&A transactions for companies operating in the aforementioned sectors and has developed unparalleled deal expertise and knowledge of the industry trends, valuation trends, and most active strategic and financial buyers. Please contact Leroy Davis, Sydney Scadden, Tomas Adduci, and/or Trent McCauley if you would like to learn more about Cybersecurity & Infrastructure Services.