Cybersecurity in Private Equity Transactions: 2025 Market Intelligence Snapshot

Overview:

• Cybersecurity now directly impacts deal success and valuation. It has evolved from a back-office IT issue into a key determinant of whether a transaction proceeds and at what price.
• From pre-close scans to IP protection reviews and post-close integration, cyber due diligence is a standard requirement.
• Cyber maturity signals operational quality and investor confidence. Strong posture reflects resilience and governance, giving buyers leverage and helping sellers command premium valuations.

Market Size & Growth 

• The cybersecurity M&A market in the U.S. is projected to surpass 2024 levels by over 10%, reflecting heightened demand for cyber-resilient assets.
• The global cybersecurity deal count reached over 310 transactions in 2025 YTD, indicating strong deal momentum and ecosystem expansion. 
• In Europe, H1 2025 saw a rise in cybersecurity M&A by maturity stage and ticket size, with increasing activity among later-stage companies. 

Key Growth Drivers

• PE firms are proactively addressing pre-close cyber threats, especially ransomware and phishing, which are rising during transaction windows. 
• Tightening regulations, notably GDPR in Europe and HIPAA in the U.S., are forcing enhanced diligence and cyber maturity assessments. 
• The drive to quantify cybersecurity ROI is incentivizing sellers to implement fixes ahead of exit, transforming cyber hygiene into valuation leverage.

M&A Overview

• Palo Alto Networks’ $24.26B purchase of CyberArk included a 26% share premium, highlighting investor appetite for identity and access management leaders. 
• Accenture’s acquisition of CyberCX for A$1 billion (~US$650 million) represents the firm’s largest-ever cybersecurity deal, showcasing PE-backed scale-up potential.
• PE firms are prioritizing deals above $250M involving cyber-mature companies with embedded zero-trust frameworks. 

AI’s Role

• AI-powered cybersecurity tools are helping reduce incident response times and detect advanced persistent threats in real time. 
• Threat actors are weaponizing AI to conduct scalable phishing and exploit scanning, increasing diligence pressure. 
• Investors are scrutinizing how AI tools in portfolio companies are trained, governed, and integrated into the broader risk architecture. 

Competitive Landscape

• CyberArk’s acquisition spotlighted its strategic strength in privileged access management, a critical security moat in M&A evaluations.
• CyberCX, under BGH Capital, scaled to become Australia's top cybersecurity services firm before exit, exemplifying value creation in PE-backed platforms. 
• Across markets, firms are being evaluated not only on IT readiness but also on governance maturity, response protocols, and supply chain cyber posture. 

‍

Sources: Axios, Reuters, S&P Global, Ropes & Gray, ECSO

‍