Thoma Bravo’s LogRhythm Merges with Exabeam in Cybersecurity Consolidation

Thoma Bravo's LogRhythm Merges with Exabeam | CyberPro Magazine

(Source – Vox)

Thoma Bravo’s Strategic Merger

Private equity powerhouse Thoma Bravo has announced a significant move in the cybersecurity domain by merging its Security Information and Event Management (SIEM) company LogRhythm with Exabeam. Exabeam, a fellow SIEM firm, has been supported by notable investors including Cisco and Lightspeed Venture Partners. This merger represents a strategic consolidation in the cybersecurity industry, which is experiencing a wave of mergers and acquisitions aimed at enhancing capabilities to detect and mitigate security threats.

The Growing Trend of Cybersecurity Mergers

The SIEM industry, which focuses on analyzing real-time data from servers, network devices, and applications to identify abnormal activities and potential security threats, is seeing notable consolidation. On the same day as the LogRhythm-Exabeam merger announcement, Palo Alto Networks revealed its acquisition of IBM’s SIEM business, QRadar. This follows Cisco’s recent $28 billion acquisition of SIEM leader Splunk, finalized in March.

The broader cybersecurity sector is also bustling with M&A activity. Earlier this month, Akamai acquired API security company Noname for $450 million, Permira took a majority stake in digital fraud detection startup BioCatch at a $1.3 billion valuation, and Thoma Bravo privatized cybersecurity firm Darktrace in a $5 billion deal. Additionally, cloud security platform Wiz achieved a $12 billion valuation after raising $1 billion, which it plans to use for further acquisitions.

Valuations and Future Prospects

LogRhythm, which raised about $126 million before being acquired by Thoma Bravo in 2018, joins forces with Exabeam, which had accumulated nearly $400 million in funding by its $200 million Series F round in 2021. Although Thoma Bravo has not disclosed Exabeam’s current valuation, the company was valued at $2.4 billion previously. However, the post-pandemic market corrections have affected many companies, with Exabeam experiencing layoffs just seven months ago, as detailed in a Reddit post.

The merger is expected to leverage AI to enhance cybersecurity solutions, as emphasized by LogRhythm CEO Chris O’Malley. He highlighted the importance of AI-driven security solutions that Exabeam brings, stating, “Together, our expertise and shared strategic vision will accelerate innovative AI-driven cybersecurity solutions for customers around the world.” O’Malley added that the market has been anticipating a strong, customer-focused leader in AI-driven security operations, and the merger aims to fulfill this need by offering a streamlined, efficient alternative to the complex solutions currently available.

This strategic merger signifies a critical step in Thoma Bravo’s approach to bolstering its presence in the cybersecurity field, aiming to deliver advanced and efficient AI-driven security operations globally.