A wave of acquisitions is sweeping through the South African cybersecurity sector, with overseas companies snapping up local players in a flurry of deal-making.

The latest example arrived last week, with European cybersecurity group Integrity360 acquiring Nclose, a South African firm with offices in Cape Town and Johannesburg. This follows Integrity360’s August 2024 acquisition of Cape Town’s Grove Group, suggesting a clear appetite for expansion in the region. The terms of the Nclose deal, like many others, remain undisclosed — a common practice that leaves observers to speculate on the motivations and valuations involved.

Integrity360’s ambitions are clear: the combined resources of Nclose and its existing South African operations will create a “significant regional hub and global Security Operations Centre (SOC),” boasting over 180 personnel. This, coupled with a new SOC in Madrid due in early 2025, will give Integrity360 six SOCs globally, providing a 24/7 multilingual service.

Nclose, founded in 2006, brings with it a solid reputation and a client base of “renowned South African and international businesses.” Its offerings span consulting, managed services, and a selection of technology solutions from international vendors. Perhaps most enticing for Integrity360 is “Cyberfire,” Nclose’s internally developed MDR (Managed Detection and Response) technology aimed at SMEs and mid-market enterprises. Integrity360 plans to “invest more” in Cyberfire and roll it out internationally. 

This acquisition is not an isolated incident. The past year has seen a string of similar moves:

• August 2024: Integrity360 acquired Grove Group, adding 600 customers across 51 countries and a fifth SOC, further cementing its African presence. The deal boosted Integrity360’s annual revenues significantly, painting a picture of aggressive expansion.
• October 2024: South African IT company Mustek acquired a 70% stake in CyberAntix, a security operations centre-as-a-service provider, for a modest R20 million ($1.1 million). This move, while smaller in scale, demonstrates the growing interest in cybersecurity within South Africa’s broader IT landscape.
• December 2024: UK-based OryxAlign acquired SDT Holdings, a managed IT services group with South African operations. This deal, aimed at bolstering OryxAlign’s global footprint, highlights the attractiveness of South Africa’s skilled workforce and established IT infrastructure.
• April 2024: QBS Technology Group acquired Maxtec, a South African cybersecurity distributor with a strong presence in the SADC region. This acquisition strengthened QBS’s META (Middle East, Turkey and Africa) presence, illustrating the strategic importance of South Africa as a gateway to the wider African market.

These acquisitions add to previous ones, including that made by Exclusive Networks of Networks Unlimited, a major regional value-added distributor serving 38 African markets, in 2021. This acquisition, establishing Exclusive Networks’ first sub-Saharan presence, highlighted the region’s growing importance in the global cybersecurity landscape.

These acquisitions paint a clear picture: foreign companies are now very eager and bullish to buy from or to establish or expand their presence in the South African cybersecurity market. The reasons are multifaceted: a growing digital economy, increasing cyber threats, a skilled workforce, and the potential to use South Africa as a springboard into the wider African continent.

While local firms emphasize the benefits of access to global resources and expertise, few questions may need some answers. What is the fate of these companies’ intellectual property and skilled personnel, in the hands of the new owners? The undisclosed financial terms of many of these deals further fuel such speculation. 

As the dust settles, one thing is clear: the cybersecurity sector in South Africa is no longer just a local affair. It’s now a global game, and the stakes have never been higher. The feeding frenzy is showing no signs of abating anytime soon.