Business
Raytheon announced on Monday that it is creating a new cybersecurity company by combining its assets with those of Websense. Raytheon Co. is betting it can leverage the cybersecurity skills it honed for the U.S. military and intelligence agencies to sell to banks and retailers, investing almost $1.7 billion to establish a stand-alone business in an area where its defense peers have struggled to make money, reports the Wall Street Journal. The company on Monday said it would buy control of Websense Inc. from private-equity firm Vista Partners LLC. Raytheon said Austin, Texas-based Websense, which has 21,000 data-security clients, half of them overseas, will form the core of a new cyber joint venture with forecast sales of $500 million this year and margins of around 20%.
Raytheon Chief Executive Tom Kennedy said the threat of cyberattacks such as the one suffered last year by Target Corp. is increasing as cloud computing and mobile services make companies more vulnerable to costly electronic intrusions by state-sponsored hackers, terrorists, organized crime or insiders.
“This overwhelming cybersecurity threat is causing concern for businesses and CEOs,” he said Monday in a telephone interview, according to Bloomberg. “It is a sobering reality.” Raytheon looked at a number of potential acquisitions before settling on Websense, Kennedy said. Over the past decade, Raytheon has done more than a dozen cybersecurity-related deals, he said. In November, Waltham, Massachusetts-based Raytheon acquired Blackbird Technologies, a surveillance and cybersecurity company for $420 million. Websense, based in Austin, Texas, makes software that blocks websites and lets companies inspect network traffic and filter e-mails for security and hacking threats. John McCormack, Websense’s chief executive officer, will hold the same title for the newly created company.
The global cybersecurity market is estimated to jump to about $156 billion in 2019 from $96 billion in 2014, according to research firm MarketsandMarkets, notes Reuters. Bain Capital LLC agreed last month to buy network security company Blue Coat Systems Inc in deal that valued the company at about $2.4 billion, including debt.
