January Security Deal Monitor

Given the state of frenetic M&A in the security space, it makes sense to look back on a monthly basis and see what deals were announced, and the eventual impact to the space. There will also be more specific deal postings as they happen, but this summary will keep things in context.

In January, there were two deals of note, both happening during the first week. Seems many companies were busy over the holidays rounding out their product portfolio. Interestingly enough, both deals were under $100 million and fall more into the category of technology acquisition.

1. Symantec buys IMLogic - IMLogic was one of the 3 instant messaging security horsemen (along with FaceTime and Akonix), which were seemingly undifferentiated. The rumor mill pegs the deal somewhere in the $75-80 million range. This was a good outcome for IMLogic, since the IM Security business hasn't really gotten beyond early adopters (like financial institutions) and Barracuda has recently entered the market, which ultimately would speed the commodity curve for stand-alone boxes. This also gives Symantec a foothold in the business and another capability to integrate into the gateway UTM platform. If you've been reading for a while, the clear direction is to centralize all of these perimeter defense capabilities into one box and now the Big Yellow has another piece of the puzzle. SYMC may be a bit early in this space, but it's not really a question of if IM security is important, it's when.
   
   
2. Blue Coat buys Permeo - This $60 million dollar buy of an SSL VPN vendor could leave some initially perplexed, but there is more to the story. Permeo was built on a client side capability to provide access control and endpoint protection. As they tried to find the market, they focused on the SSL VPN gateway. Blue Coat did this acquisition to get a more focused presence on the desktop, as it's clear blocking malware on the perimeter is critical and necessary, but it's not sufficient. Some type of desktop presence is needed and Permeo gives Blue Coat the beginning of that story. The only complicating factor is Blue Coat's recent earnings miss and the pounding that its stock took. The deal value is considerably lower now, so Permeo's investors need to figure out whether it still makes sense. I suspect Blue Coat will close this deal, since this is a much better outcome for Permeo, rather than trying to continue slugging it out with Juniper and Aventail.