Dive Brief:
- LevelBlue closed its acquisition of managed detection and response platform Cybereason Tuesday, cementing its status as one of the world’s largest managed security service providers.
- The deal was backed by investments from SoftBank and Liberty Strategic Capital, according to the announcement. LevelBlue and Cybereason announced the deal in October and have not disclosed any financial terms.
- Cybereason is LevelBlue’s fourth major acquisition since AT&T spun off the cybersecurity provider last year. The company has also closed deals with Aon's cybersecurity consulting business and fellow MSSP Trustwave this year.
Dive Insight:
The Cybereason deal expands LevelBlue’s digital forensics, incident response and research capabilities. It also extends the company’s geographical reach.
Cybereason gives an Asia-Pacific boost to a security provider that already had a global footprint. With Cybereason’s resources, which include a research hub it opened in Japan last year, LevelBlue can more effectively support multi-national corporations that outsource cybersecurity.
The move comes at a time when IT service providers throughout the channel are prioritizing security. Many partners view MDR as strategic, though not all of them have the resources to deliver it on their own.
As LevelBlue grows, channel partners are seeing one of the most influential security suppliers deepen its portfolio. The company has existing agreements with national tech services distributors, which Cybereason lacks. In an age where MSSPs are consolidating en masse, it’s better for partners to have contracts with the acquirers. When LevelBlue bought Trustwave — which sold through TSDs — partners lost a vendor.
The deal has geopolitical undertones. Liberty Strategic Capital, a private equity firm founded and led by Former U.S. Secretary of the Treasury Steven Mnuchin, was an early investor in Cybereason.
Mnuchin is a vocal proponent of strong cyberdefenses.
"Cybersecurity is now inseparable from economic security and national resilience," Mnuchin said in an October release announcing his appointment to the LevelBlue board of directors.
Putting a seal on the Cybereason deal ends a year of corporate drama.
Trustwave and Cybereason flirted with a merger last year. Cybereason backed out in March amid boardroom upheaval. Former Cybereason CEO Eric Gan resigned and filed a lawsuit against Mnuchin and Softbank’s Vision Fund. Gan claimed they had obstructed his efforts to "stave off bankruptcy," Bloomberg reported in March.
“I cannot continue to lead a company where critical decisions are made based on personal interests rather than what is best for the organization,” Gan wrote in a memo quoted by Bloomberg. “I cannot stand by while minority shareholders, employees and customers suffer the consequences.”
LevelBlue announced in July its intention to acquire Trustwave and closed the deal in August.
