Palo Alto Networks ($PANW) is acquiring The Crypsis Group from ZP Group for $265 million. Palo Alto Networks will gain incident response, risk management and digital forensics consulting expertise, the buyer says.
This is M&A deal 336 that MSSP Alert and ChannelE2E have covered so far in 2020. See the full M&A deal list here.
The Crypsis Group has more than 150 security consultants who assist customers with more than 1,300 engagements per year. It sounds like the acquired consulting team will align with Palo Alto Cortex XDR -- the company's prevention, detection and response platform.
MSSP Alert is checking to see if or how Palo Alto Networks plans to balance its growing cyber consulting services with partner relationships -- particularly channel engagements with MSPs, MSSPs and digital forensics firms.
Palo Alto Networks Acquires The Crypsis Group: Executive Perspectives
In a prepared statement about the deal, Palo Alto Networks CEO Nikesh Arora said:
"The proposed acquisition of The Crypsis Group will significantly enhance our position as the cybersecurity partner of choice, while expanding our capabilities and strengthening our Cortex strategy. By joining forces, we will be able to help customers not only predict and prevent cyberattacks but also mitigate the impact of any breach they may face."
Added Bret Padres, CEO of The Crypsis Group:
"We have dedicated ourselves to creating a more secure world through the fight against cybercrime. Together with Palo Alto Networks, we will be able to help businesses and governments better respond to threat actors on a global scale."
Concluded Justin Jordan, chairman and CEO of ZP Group:
"Bret Padres and the Crypsis leadership team have built a world-class incident response and digital forensics company. I cannot think of a better organization to leverage and scale the services that Crypsis offers than Palo Alto Networks."
The M&A deal is expected to close before the end of Palo Alto Networks' current quarter.
Palo Alto Networks Acquisitions
After hiring Google veteran Nikesh Arora as CEO in mid-2019, Palo Alto Networks has maintained steady M&A activity.
Recent deals include acquiring:
- CloudGenix for SD-WAN services.
- Aporeto, a company that provides a Zero Trust Cloud Security Platform and machine identity-based micro-segmentation.
- Zingbox, an Internet of Things (IoT) cybersecurity company.
- Twistlock for cloud container & VM cybersecurity.
- Demisto, a startup Security Orchestration, Automation and Response (SOAR) software provider for MSSPs.
- Compliance & risk management platform provider RedLock for $173 million.
Generally speaking, the deals align with Palo Alto Networks’ channel partner and MSSP initiatives — which have been accelerating. Still, we're checking to see if The Crypsis Group deal potentially introduces some channel consulting partner conflicts.
Palo Alto Networks Financial Performance
The acquisition news surfaces the same day that Palo Alto Networks announced Q4 results for fiscal year 2020. Total revenue for the fiscal fourth quarter 2020 grew 18% year over year to $950.4 million, compared with total revenue of $805.8 million for the fiscal fourth quarter 2019.
