Swedish telecoms and cybersecurity software developers Enea have completed the purchase of Irish firm AdaptiveMobile Security in a deal that valued their target at EUR45mn (USD53mn). AdaptiveMobile Security will reportedly be treated as a division of Enea and will continue to sell products and services using its existing brand. Enea has a track record of acquiring specialist network security businesses and their portfolio will be enhanced by adding AdaptiveMobile Security’s strengths in signaling security.
Enea financed the acquisition by drawing on their cash reserves and through a bank loan. AdaptiveMobile Security previously had Intel Capital and Doughty Hanson & Co as their majority shareholders.
The official announcement of the M&A agreement quoted Brian Collins, CEO of AdaptiveMobile Security, who is understood to be continuing as the leader of his team.
It is critical to protect mobile networks against an ever-increasing threat landscape to maintain the integrity of national and international communications. Together with Enea, we can now serve a wider range of customers and offer an unrivalled combination of networking and security expertise.
Enea President and CEO Jan Häglund (pictured) hinted at the likeliest driver for future sales.
As the global leader in mobile network security, AdaptiveMobile Security expands our market presence and broadens our offering to operators, creating interesting opportunities in areas such as 5G security.
Independent analyst Patrick Donegan of HardenStance welcomed the deal in a briefing paper that was not paid for by either company.
Ever looked at a merger or acquisition of tech companies and wondered ‘what on earth is that all about?’ This isn’t one of those. These two look like a good fit.
Donegan believes the deal is favorable because some telcos prefer to satisfy their security needs by working with a single supplier instead of integrating solutions from multiple firms. He also emphasized the advantages of having diversity amongst firms providing 5G network functionality, and observed that the bulking up of Enea will help them attract investment whilst realizing efficiencies. Donegan wrote that existing AdaptiveMobile Security customers should welcome the new owners.
AdaptiveMobile’s management could have been tempted by an offer from private equity or from a vendor based in a country that might have made some customers and government regulators uncomfortable. Headquartered in Sweden, ENEA is highly unlikely to spark customer objections the way other buyers might have.
Enea’s interest in AdaptiveMobile Security reinforces market expectations that telcos will keep doing more to tighten the security surrounding network signaling. The challenge is for vendors to differentiate their offerings in order to provide a clear sense of who can do most to enhance security. Emea has the potential to realize an advantage by linking their strengths in deep packet inspection with the capabilities already provided by AdaptiveMobile Security.