Booz Allen Hamilton, which operates a Top 250 MSSP business unit, is seeking to make more tuck-in acquisitions in such areas as cybersecurity services and healthcare technology. Chatter about the M&A pursuits surfaced during a Booz Allen investor day last week, The Wall Street Journal reported.
Booz Allen expressed similar M&A views in January 2021. The company since that time has acquired Liberty IT Solutions for healthcare IT consulting, and cybersecurity services provider Tracepoint.
Looking ahead, Booz Allen plans to spend about $4 billion between April 2022 and March 2025, largely on acquisitions, The Wall Street Journal indicated. That is up from the $1.3 billion it spent in total during the past four fiscal years -- and most of that money went to share buybacks and dividends, The Journal noted.
MSSP and Cybersecurity Acquisitions: What's Driving M&A Activity?
Still, competition looms large in the technology M&A sector -- especially in the MSP- and MSSP-oriented cybersecurity markets. Among the variables driving strong cyber M&A:
- Talent: The cyber skills shortage is driving MSSPs to find talent through M&A.
- Threats: The growing, shifting threat landscape is inspiring M&A deals to close technology and expertise gaps.
- Speed to Market: Acquiring companies can often be a faster path into a new or evolving technology market or business region.
- Scale: Smaller MSSPs are merging to counter the scale of larger rivals.
- Growth: The traditional MSP market will experience sub-10 percent compound annual growth rates (CAGR) in the years ahead. The MSSP market, in stark contrast, is growing at an 18 percent CAGR.
Amid that backdrop, MSSP Alert has tracked nearly 80 MSSP mergers and acquisitions from 2019 through October 2021.
