Exabeam logo on office wall

Private equity giant Thoma Bravo has announced that its security information and event management (SIEM) company LogRhythm will be merging with Exabeam, a rival cybersecurity company backed by the likes of Cisco and Lightspeed Venture Partners.

SIEM is the business of using real-time data gleaned from servers, network devices, and applications to flag abnormal activity and thwart potential security threats before they escalate. Consolidation in the space is rife. The LogRhythm and Exabeam merger news arrived on the same day as Palo Alto Networks confirmed it was acquiring the assets of IBM’s SIEM business, QRadar, which IBM had acquired in 2011. It also follows Cisco’s $28 billion megadeal to procure SIEM giant Splunk, a deal that closed in March.

More broadly, the cybersecurity space is awash with M&A activity: Earlier this month, Akamai revealed it was acquiring API security company Noname for $450 million; Permira bought a majority stake in digital fraud detection startup BioCatch at a $1.3 billion valuation; and Thoma Bravo reared its head again to take cybersecurity company Darktrace private in a $5 billion deal.

Elsewhere, cloud security platform Wiz hit a whopping $12 billion valuation on a $1 billion fundraise, an investment it says will be used substantively to scoop up other cybersecurity startups.

LogRhythm, for its part, had raised around $126 million before Thoma Bravo swooped in and acquired a majority stake back in 2018 for an undisclosed figure. Exabeam, meanwhile, took its total funding to nearly $400 million at its $200 million Series F round in 2021. Thoma Bravo hasn’t divulged Exabeam’s valuation at this merger. Exabeam was previously valued at $2.4 billion. Many companies’ valuations have plummeted in the great post-pandemic correction, however, and Exabeam has hit a few bumps. This Reddit post details layoffs seven months ago, for example.

As with just about every sector these days, AI is playing an increasingly pivotal part in the cybersecurity space, and it’s “AI-driven security solutions” that LogRhythm CEO Chris O’Malley says is what Exabeam brings to the table.

“Together, our expertise and shared strategic vision will accelerate innovative AI-driven cybersecurity solutions for customers around the world,” O’Malley said in a statement. “Vigilant CISOs have eagerly awaited the emergence of a strong, customer-obsessed, singularly-focused global leader in AI-driven security operations — one that offers a best-of-breed alternative to the frustratingly complex options on the market today. That day has arrived.”

Thoma Bravo said it expects the merger to close in Q3 2024.

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