Raytheon buying cybersecurity company for about $1.9 billion
Apr. 20, 2015
NEW YORK (AP) — Raytheon is buying cybersecurity company Websense from private equity firm Vista Equity Partners for about $1.9 billion in a move aimed at making defense-grade cyber protection available to commercial companies.
The Waltham, Massachusetts-based company best known for its military defense systems will invest just under $1.6 billion to gain majority ownership of the company and ultimately contribute $1.9 billion to the combined venture.
Vista Partners will invest about $335 million for a minority stake as part of the overall deal.
The combined company will include Raytheon's cyber products operations and along with Vista's Websense operations. The combined business will be part of Raytheon and will be headed by John R. McCormack, current CEO of Websense.
"The market for advanced cyber solutions that protect and defend global industry and infrastructure is rapidly growing due to the sophisticated threats posed by well-funded, nation-state adversaries and criminal networks," said Raytheon Chairman and CEO Thomas A. Kennedy, in a statement.
The issue of cybersecurity for commercial businesses was heightened last December when Sony Pictures faced an extensive hack that resulted in the release of confidential emails ahead of its release of "The Interview," a comedy that centers around the imagined assassination of North Korean leader Kim Jong Un. A group calling itself Guardians of the Peace claimed credit for the attack, and U.S. intelligence officials said the group was linked to North Korea, but no official link has been made.
Both Sears Holdings Corp. and Target Corp. have had to deal with massive hacking attacks over the last few years that compromised credit and debit card data, bringing the issue closer to home for most consumers.
Raytheon expects the Websense deal to close in the second quarter.
Raytheon shares dropped $1.03 to $106.69 in morning trading Monday. Its shares have risen more than 6 percent over the past year.