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IT security niche off to slow M&A start in 2008, says Updata

Although their stock prices have performed well during the first quarter of 2008, IT security companies have experienced a "relatively slow start" in merger and acquisition activity during the same period, according to a recent report issued by Updata, an investment banking firm with offices in New York, New Jersey and Virginia that focuses on the information technology sector.

There were only 12 M&A deals in the IT security niche during Q1 in 2008 compared with 19 such deals during the same quarter in 2007. Among the "noteworthy" transactions during the most recent quarter were L-1 Identity Solutions, Inc.’s purchase of Digimarc Corp. for about $250 million and its purchase of Bioscrypt, Inc., for $41.3 million, as well as PayPal’s acquisition of Fraud Sciences, Ltd., for $169 million, Updata reported.

Among the M&A trends identified by Updata were an increase in cross-border transactions, the fact that compliance has become a major deal driver and identity management remains a hot field.

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