F-Secure Takes A Big Step Towards Cyber Security Leadership By Acquiring MWR InfoSecurity

F-Secure has on 18 June 2018 signed an agreement to acquire all the outstanding shares of MWR InfoSecurity. The acquisition is a significant milestone in the execution of F-Secure’s growth strategy and makes it the largest European single source of cybersecurity services and detection and response solutions.

Today businesses are challenged by a dynamic advanced threat landscape in which attackers continuously use well-designed technology to circumvent traditional protection. Security perimeters are no longer enough to protect organizations, and developing better security capabilities on their own is out of reach for many organizations.

Due to the shortage of skilled cybersecurity experts in-house there is a huge demand for both products and services to proactively search for newly emerging threats, detect and respond faster and especially stop future incidents. F-Secure’s combination of man and machine – an approach shared by MWR InfoSecurity – uniquely positions the company to support businesses to fight advanced attacks with its cybersecurity products and services.

With close to 400 employees, MWR InfoSecurity is among the largest cybersecurity service providers serving enterprises globally. MWR InfoSecurity has highly skilled experts in offensive techniques who understand the attacker mindset and is well-known in the industry for its technical expertise and research.

Its threat hunting platform Countercept provides extensive proactive attack detection and complements F-Secure’s existing strengths. Additionally, F-Secure’s portfolio will be enhanced by MWR InfoSecurity’s suite of managed phishing protection services (phishd). As cybercriminals increasingly target companies through their employees, it’s crucial to enable company personnel to identify and avoid these email-borne attacks.

“We’ve always relied on research-driven innovations executed by the best people and technology. This approach has earned MWR InfoSecurity the trust of some of the largest organizations in the world,” says MWR InfoSecurity CEO, Ian Shaw who will join F-Secure’s Leadership Team after closing of the transaction in July. “We see this approach thriving at F-Secure, and we look forward to working together so that we can break new ground in the cybersecurity industry.”

The combined company will have hundreds of the world’s best cybersecurity consultants, making F-Secure one of the few truly global technical security advisors positioned to help organizations fight today’s most sophisticated threats. Learnings from the most challenging incident investigations and from targeted attack simulations provide insights that feed directly back into product creation, ensuring the company’s detection and response solutions are constantly upgraded to meet the latest threats.

Financial overview of MWR InfoSecurity

Figures in the table are for illustrative purposes only and reflect MWR InfoSecurity’s accounting principles according to UK GAAP. Figures for the financial year 2017 are based on MWR InfoSecurity’ audited financial statements. Figures for 2018 reflect MWR InfoSecurity’s estimated financial performance for the financial year ending on 30 June 2018.

Figures have been translated into Euros by using the average exchange rate for the British Pound for the financial period (0.8595 forFY2017: 1 July 2016 – 30 Jun 2017; 0.8870 for FY2018: 1 July 2017 - 31 May 2018).

Completion, consideration and financing

The transaction is expected to be completed in early July 2018. The initial cash consideration for the completed acquisition of all of the outstanding shares of MWR InfoSecurity Limited is GBP 80 million (EUR 91,6 million), subject to customary cash, debt and working capital adjustments.

In addition, an earn-out of a maximum of GBP 25 million (EUR 28,6 million) in cash will be paid after 18 months of the complete subject to the achievement of agreed business targets for the period from 1 July 2018, until 31 December 2019.

Consideration figures have been translated into Euros by using the average exchange rate of 0.8732 for the British Pound on 15 June 2018.

F-Secure is financially well-prepared for the transaction with a strong balance sheet. The transaction will be financed by F-Secure’s cash reserve and committed bank financing. The bilateral EUR 60 million five-year financing arrangement with Nordea Bank comprises a long-term loan as well as a revolving credit limit and includes customary covenants. The upfront payment will be made with company’s cash assets and the term loan of EUR 37 million.