Digital Transformation in Cybersecurity a Major Driver of Future M&A Deals

Digital transformation in the cybersecurity industry will be a major driver of mergers and acquisitions (M&A) over the remainder of 2020, according to ICON Corporate Finance. This follows a survey by the technology-focused investment bank of some of the most active M&A buyers in the UK, which showed that there remains substantial interest in tech sector acquisitions despite the economic fallout of COVID-19.

ICON found that the key areas for expansion are expected to be in cybersecurity, fintech, cloud, managed services, healthtech, AI and enterprise software. This is because digital transformation has become the most pressing priority for organizations in the aftermath of COVID-19.

In regard to cybersecurity, ICON noted that companies are increasingly turning to technology to protect against potential business disruption caused by cyber-attacks, ensuring employees and systems are secure, particularly in the context of the huge rise in remote working. According to Pitchbook Data’s Emerging FinTech research, this is particularly the case for financial institutions, where new areas of risk and regulation have been introduced to address increasing cyber-threats and data security concerns.

ICON added that it believes organizations in the US tech market will continue to be especially active in seeking out M&A opportunities in deep tech and disruptive young companies.

With this in mind, the investment bank, which has previously facilitated IQVIA’s acquisition of UK-based Optimum Contact, and JP Morgan’s funding of UK-based Mosaic Smart Data, is opening an office in San Francisco. This is to provide clients in Europe, Africa and Asia with direct access to the “epicenter of the world’s tech community.”

CEO and founder of ICON, Alan Bristow, commented: “As the world discovers the new normal, it is the tech sector that will drive societal changes and enable new ways of working. The US West Coast’s innovative approach and its dominance in deals origination is the core driver for our new presence in San Francisco. We are excited to be bringing US markets to Europe’s doorstep, and vice versa.”

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