In a deal that Xconomy was first to report on last week, IBM Security confirmed it plans to acquire Resilient Systems, a Cambridge, MA-based cybersecurity startup with about 100 employees.
The financial terms and structure weren’t disclosed, but one source with knowledge of the deal previously told me the price is north of $100 million. Another source says the transaction will probably be in cash. The deal is expected to close later this year, according to IBM.
“By adding Resilient Systems’ technology and expertise, IBM will have an industry-leading range of capabilities to help clients respond to cyber breaches, across consulting, services, and products,” Marc van Zadelhoff, general manager of IBM Security (also based in Cambridge), said in a press release. He added that “we are doubling down on the incident response market. Cybersecurity needs to function like an immune system, both in preventing breaches, but also in quickly eradicating those that do occur.”
Resilient Systems, formerly known as Co3 Systems, was founded in 2010. According to PitchBook, the company has raised $17.3 million from investors including venture firm Fairhaven Capital, which led a $7.3 million round in 2012.
A source familiar with Resilient tells me the company’s other main investor is ClearSky, a venture fund affiliated with a public utility company in Florida, which led Resilient’s most recent funding round, $10 million in 2014. (Jamie Huff, managing director of ClearSky Power & Technology Fund, is listed on Resilient’s website as a board member.) Resilient’s PitchBook profile says the 2014 round was done at a post-money valuation of $24.2 million—which would suggest the investors own most of the company.
As I previously reported, the acquisition seems to make sense. Resilient says its software helps companies and organizations respond to cyber attacks once there is a breach, so it fits with IBM Security’s desire to boost its incident response capabilities. “By combining, the market now has access to the leading prevention, detection, and response technologies available in the same portfolio—the security trifecta,” Resilient CEO John Bruce said in the release.
Resilient is at least the third prominent Boston-area tech startup to be acquired in 2016, following Runkeeper (bought by Asics) and Xamarin (bought by Microsoft). And it represents at least the 23rd acquisition of a Massachusetts software company by IBM since 2003—some others include Q1 Labs and Trusteer in security, and Cloudant, Netezza, and Unica in other areas.
In related cybersecurity news, IBM says it has formed a partnership with Carbon Black—formerly called Bit9 + Carbon Black—to provide services in both incident response and threat protection. (Yes, it’s RSA Conference week in San Francisco.) With this mini-flurry of deals, one has to wonder whether IBM Security might continue to roll up Boston-area companies in its backyard.
