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Thoma Bravo’s LogRhythm merges with Exabeam in further cybersecurity consolidation

Private equity giant Thoma Bravo announced that its security information and event management (SIEM) company LogRhythm will merge with Exabeam, a rival cybersecurity company backed by Cisco and Lightspeed Venture Partners.

SIEM involves using real-time data gleaned from servers, network devices and applications to flag abnormal activity and thwart potential security threats before they become serious. Consolidation in space is commonplace. News of the LogRhythm and Exabeam merger came on the same day that Palo Alto Networks confirmed the acquisition of the assets of IBM’s SIEM business, QRadar, which IBM itself acquired in 2011. It also follows to Cisco’s $28 billion mega-deal to acquire SIEM giant Splunk, a deal closed in March.

More broadly, the cybersecurity sector is rife with M&A activity: earlier this month, Akamai revealed it was acquiring API security company Noname for $450 million; Permira bought a majority stake in digital fraud detection startup BioCatch at a valuation of $1.3 billion; and Thoma Bravo raised its head again to take cybersecurity company Darktrace private in a $5 billion deal.

Elsewhere, cloud security platform Wiz has hit a whopping $12 billion valuation on a $1 billion fundraising round, an investment it says will be widely used to scoop up other cybersecurity startups .

LogRhythm, for its part, had raised around $126 million before Thoma Bravo stepped in and acquired a majority stake in 2018 for an undisclosed figure. Exabeam, meanwhile, increased its total funding to nearly $400 million in its $200 million Series F round in 2021. Thoma Bravo did not disclose Exabeam’s valuation in this merger. Exabeam was previously valued at $2.4 billion. However, many companies’ valuations fell during the great post-pandemic correction; and Exabeam encountered some obstacles. This Reddit post details layoffs six months ago, for example.

As in almost every industry these days, AI is playing an increasingly central role in cybersecurity, and it’s “AI-powered security solutions” that Chris O’Malley, CEO of LogRhythm, consider what Exabeam brings to the table.

“Together, our expertise and shared strategic vision will accelerate innovative AI-driven cybersecurity solutions for customers around the world,” O’Malley said in a statement. “Vigilant CISOs have been eagerly awaiting the emergence of a strong, customer-obsessed global leader singularly focused on AI-enabled security operations – one that offers the best alternative to the frustratingly complex options on the market today. This day has arrived.

Thoma Bravo said it expects the merger to be completed in the third quarter of 2024.


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