Dive Brief:
- Sophos is acquiring Secureworks in a deal valued at $859 million to bolster its security offerings and expand its customer base, the cybersecurity vendors said Monday. The all-cash deal is expected to close in early 2025.
- The combination will create a broad portfolio of cybersecurity tools by bringing Secureworks' extended detection and response capabilities into Sophos’ platform for managed detection and response. Sophos said it is also developing new services for identity detection and response, security information and event management, and operational technology.
- “Secureworks’ renowned expertise in cybersecurity perfectly aligns with our mission to protect businesses from cybercrime by delivering powerful and intuitive products and services,” Sophos CEO Joe Levy said in a statement. “This acquisition represents a significant step forward in our commitment to building a safer digital future for all.”
Dive Insight:
Sophos’ deal for Secureworks is the latest deal in a wave of vendor consolidation, which is influenced by rising interests for customers to receive end-to-end offerings from a single provider.
Vendors are combining toolsets and augmenting go-to-market strategies to lure customers away from scattered offerings from competing platforms.
Palo Alto Networks, the largest cybersecurity vendor, began pursuing a strategy of “platformization” earlier this year that involves deferred billings and other incentives to consolidate customers on its platforms.
Cisco closed a deal to acquire Splunk for $28 billion earlier this year, the largest acquisition in its 40-year history, in an effort to transform the networking and enterprise IT giant into a major player in the cybersecurity space.
Sophos’ acquisition of Secureworks also underscores a broad investment appetite for untapped growth potential in the cybersecurity market. Private equity firm Thoma Bravo, which has an extensive cybersecurity portfolio, acquired Sophos for $3.9 billion in 2020.
Sophos and Secureworks both announced staff cuts in early 2023. Secureworks eliminated about 200 jobs, 9% of its staff at the time, and Sophos cut 450 jobs, about 10% of its staff at the time.
