CrowdStrike Deal Values Israeli Firm XM Cyber's Tech at $600 Million
Translated & summarized from Calcalist by baba
Cybersecurity firm CrowdStrike has revealed the full $600 million value of its acquisition of Israeli company XM Cyber's technology, primarily paid in stock. The deal, initially announced in July with only $145 million in cash, has seen its stock component surge due to CrowdStrike's rising share price. XM Cyber, founded by former Mossad chief Tamir Pardo and others, was previously sold to Germany's Schwarz Group for $700 million in 2021. CrowdStrike is acquiring XM Cyber's code and patents, not its revenue or clients.
The story in 6 lines · by baba
- CrowdStrike's acquisition of XM Cyber's technology is valued at approximately $600 million, primarily in stock.
- The deal's stock component surged due to CrowdStrike's share price increase since the initial July announcement.
- XM Cyber was founded by former Mossad chief Tamir Pardo and others in 2016.
- XM Cyber was previously sold to Germany's Schwarz Group for $700 million in 2021.
- CrowdStrike is acquiring XM Cyber's code and patents, excluding revenue and customers.
- XM Cyber reportedly has a backlog of $450 million in orders.
Cybersecurity giant CrowdStrike has disclosed the full value of its acquisition of Israeli firm XM Cyber's technology, which was initially reported in July. The deal, primarily settled in stock, was initially considered non-material by CrowdStrike, with only $145 million in cash specified at signing, plus a stock component to be determined upon completion.
Upon closing, CrowdStrike revealed the total consideration, filing with the U.S. Securities and Exchange Commission. The stock portion alone significantly boosts the valuation, with XM Cyber's stakeholders set to receive 2.1 million CrowdStrike shares at $208 per share. This brings the total payment for XM Cyber's technology to approximately $600 million, reportedly the largest sum ever paid for technology rather than an entire company. Since the deal's closing, CrowdStrike's stock price has further increased, benefiting XM Cyber's founders and employees.
The primary seller, Germany's Schwarz Group, acquired XM Cyber five years ago for $700 million. XM Cyber was founded in 2016 by former Mossad chief Tamir Pardo, along with Noam Erez and Shaul Shani. Pardo is no longer involved with the company. While XM Cyber maintains some Israeli employees at its Herzliya offices, its operational center has shifted to Germany. The company developed technology for simulating cyberattacks and identifying attack paths.
XM Cyber's previous sale in 2021 for $700 million, following a $48 million funding round, yielded substantial returns for its founders and early investors. However, the Schwarz Group, a retail conglomerate that attempted to expand into cloud and digital sectors during a market peak, apparently struggled to leverage XM Cyber's operations effectively, leading to the current sale. CrowdStrike stated it is acquiring XM Cyber's code and 45 patents, but not its revenue streams or customer base. XM Cyber's Israeli personnel may continue working with the technology under a license from CrowdStrike. Current estimates suggest XM Cyber has a backlog of $450 million in orders.
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