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Expert: 'Ludicrous' Price Tags on Cybersecurity Acquisitions

Expert: 'Ludicrous' Price Tags on Cybersecurity Acquisitions - top government contractors - best government contracting event
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Expert: 'Ludicrous' Price Tags on Cybersecurity Acquisitions - top government contractors - best government contracting event
Andy Stevens, Cobham

The price of cybersecurity firms has been pushed to “ludicrous” levels by defense companies desperate to move into the fast-expanding market, according to an industry expert.

Andy Stevens, the chief executive of Cobham, said he was “not even bothering” to pursue acquisition opportunities in cybersecurity because competitors were willing to pay absurd prices, according to The Australian.

As defense spending in traditional areas diminishes, companies have sought to find alternative sources of income, with many moving into cybersecurity, which governments have identified as a significant future threat.

The Australian identified BAE Systems as being “particularly aggressive” in boosting its cyber division and buying a handful of companies in two years. Other major defense firms, such as Boeing, Lockheed Martin and EADS, have also zoned in on cyber and have begun to make acquisitions, The Australian said.

“Cyber is an area we have just had to walk away from because the multiples are now ludicrous,” Stevens said. “The big primes are able to put so much money on the table. They have got their own problems because they are selling fewer tanks. They have got to buy revenues in areas that are growing.”

Despite banks calling with great opportunities, Stevens said once he knows who else is interested, the potential deal “is not even worth bothering.”

In the last 12-18 months, Stevens said he has seen “the primes come in to a negotiation and double what is on the table.”

 

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