Cybersecurity · Industry brief

Drake Star's Q3 2026 MSP Market Update reports 122 total transactions including 110 M&A deals and 12 private placements. Platform valuations remain stable at 12-13x EBITDA with add-ons at 9-10x, sustaining consolidation momentum. Buyer behavior is shifting toward specialization—IT services fell to 86% of deal count as acquirers increasingly pursue communications, software, and commercial services capabilities. Supply is rising from founder-owned MSPs in the $2-6M EBITDA range, which may apply modest pressure on multiples. Private placements doubled quarter-over-quarter to 12 deals, with PE platforms investing in MSP Corp., ECI, PLENTICON, and OryxAlign. Europe accounted for 53% of volume. According to Drake Star Partner Sam Levy, generalist MSPs without clear differentiation are facing headwinds as buyers demand strategic capability fit and recurring revenue.

Astrix Security was acquired by Cisco, with the deal positioning non-human identity (NHI) management as a strategic platform gap-filler rather than a competitive feature overlay. According to Alon Jackson's discussion with Amit Karp, Cisco valued the acquisition for its NHI capabilities that complemented rather than duplicated Cisco's existing identity stack. The deal underscores M&A trends in cybersecurity where acquirers prioritize platform consolidation, category ownership (including analyst positioning and market terminology), enterprise customer relationships with large contract values, and technology that addresses market infrastructure needs rather than point solutions. A crowded competitive category in NHI validated the market maturity and infrastructure-level importance of the segment to strategic buyers.

The managed data security posture management (DSPM) services market is experiencing significant consolidation activity. Veeam Software acquired Securiti AI for USD 1.725 billion in October 2025, combining data resilience with DSPM, privacy, governance, and AI trust capabilities across hybrid, multicloud, and SaaS platforms. Forcepoint announced its agreement to acquire Getvisibility in March 2025 to expand AI-driven data security and risk visibility. Deutsche Telekom and Palo Alto Networks launched Sovereign Cortex with T Security in June 2026, a European data-sovereign cyber defense managed service with encryption key authority retained by Deutsche Telekom. These transactions reflect broader consolidation as platform vendors integrate data posture tools into larger security portfolios, shifting purchasing decisions from point technology selections to platform-wide evaluations. Market growth is driven by escalating regulatory obligations including DORA (applied to EU financial entities since January 2025), NIS2 cybersecurity requirements, and GDPR compliance needs, which are creating demand for continuous data control evidence and managed service delivery. The market is projected to expand from USD 1.48 billion in 2027 to USD 3.89 billion by 2032 at a CAGR of 21.32%, with fully managed DSPM services expanding at 23.61% and professional services at 22.73% through 2032.