Author: Callum Turcan, Corum Group Analyst
Security sector saw 523 deals in 2025, exceeding the 10-year high of 476 transactions achieved in 2021. Demand was strong from strategic and financial buyers with PE firms acquiring 223 Security companies, equal to 43% of total deal volumes.
In 2025, total disclosed M&A transaction values reached $80.6B, well above 2022, 2023 and 2024 levels due primarily to a $32B megadeal in the first quarter and a $24.9B megadeal in the third. Only 13% of deals disclosed their financial terms as buyers preferred to keep their M&A strategies private.
Looking at VC funding, after peaking in 2021, VC funding for Security sector companies has declined considerably since then, as have deal volumes. Companies have been encouraged to pursue M&A strategies for growth and liquidity.
During 2025, disclosed M&A deal values ranged from $440,000 to $32 billion with a median M&A transaction size of $120 million. Of note, 51% of sellers used a SaaS business model and at least 20% were developing deep tech, such as AI. There is ample room for these figures to increase going forward as buyers prefer the stable and recurring nature of SaaS revenue streams and are incredibly keen to capitalize on the potential AI has for cybersecurity.
Companies in the Security Services subsector saw significant interest, representing 35% of total deal volumes, followed by Identity and Access Management, which represented 13% of the total and another noteworthy category was Physical Security with 13% of deals.
We spotted a few representative revenue exit multiples, including 23 times deal for a developer of data protection solutions. An IoT security specialist saw a 12.7 times revenue offer and a provider of identity management received one for 8 times, and a cybersecurity managed services provider secured a 5.4 times transaction. More examples are covered in the representative transactions section.
Now looking at sellers by geography, the US was home to 51%, followed by companies based in UK at 10% and the Germany at 5%. Additionally, there was significant activity in the Middle East.
In terms of buyers based on geography, acquirers in the US were responsible for 56% of transactions followed by the United Kingdom at 7%. Germany and France each represented the headquarters of 4% of acquirers. Dealmaking was international with 34% of transactions being cross-border.
During 2025, we saw financial acquirers as the most acquisitive: Thoma Bravo added 7 security companies to its portfolio, Alpine Investors closed 6 deals, and Gemspring Capital made 5 transactions, followed by Charlesbank, Insight Partners, August Equity and MC Partners – with 4 each. The most active strategic acquirers were ASSA ABLOY, a global leader in access management solutions, with 5 deals and JumpCloud, an identity management platform creator with 4 deals.
Out of 8 Security megadeals in 2025, the four largest ones were:
Cloud security company Wiz was acquired by tech giant Alphabet in March for $32 billion.
Cloud-native identity security company Cyber Ark was acquired by another giant, Palo Alto, in July for $24.9 billion.
Agentless cyberexposure management company Armis was acquired by ServiceNow in December for $7.7 billion.
Finally, Hornetsecurity, a Microsoft 365 security and compliance solutions provider catering to MSPs in Europe, was acquired by Thoma Bravo-backed cloud security Proofpoint for $1.8 billion. The buyer got to reach the SMB segment with its largest-ever acquisition.
Some representative transactions included the acquisition of US-based cyber security, information technology, intelligence analysis, and a software suite company SilverEdge by US-based security firm SAIC for $205 million in October to advance its strategy of bringing IP-based solutions and commercial products to customers.
In another interesting October deal, AI-powered cyber threat intelligence software provider ThreatConnect was bought by Dataminr for $290 million, to enhance threat-intelligence capabilities.
Finally, in November, SplxAI, open-source artificial intelligence (AI) security software company, was bought by Zscaler for $65 million, bolstering Zscaler’s AI security offerings.
