The casino’s new aquarium was a magnificent centrepiece amongst the blackjack tables, roulette wheels and perspiring high rollers desperate for that hitherto absent stroke of luck. The exotic fish and assorted creatures from the deep that made it their home were kept at exactly the right temperature and fed heartily and regularly thanks to an automated system controlled by the casino’s IT network.

It may seem like an urban legend of old but what happened next is undoubtedly true. Staff had forgotten that their bullet-proof network was connected to the aquarium. Soon enough, ingenious hackers spotted this open back door to the casino’s computer systems and subsequently the bank accounts of its highest high rollers.

Luckily, a vigilant cyber security consultant had noticed the flaw just before the hackers could stride through and cause untold havoc. Nevertheless, that such an innocent addition to the casino’s interior design was so nearly the source of its financial devastation told a very new type of salutary tale for the modern age.

With British defence firms recently warning staff not to connect their phones to Chinese-made electric vehicles, and Marks and Spencer’s recent travails, cyber security continues to make the headlines. In response to this huge range of threats, it is hardly surprising that there are now a myriad of cyber security companies providing an array of solutions from network, app and cloud security, to the more physical such as biometric scanners that supervise access to supporting infrastructure.

The Sector

According to a newly released report by the Department for Science, Innovation and Technology, the UK cyber security sector generated revenue of £13.2 billion in 2025, up 12% from the previous year. There are also 74 new cybersecurity firms, bringing the total to 2,165 in a sector that now employs over 67,000 people. Unsurprisingly, the report also emphasises the strategic importance of the sector, noting its critical role in protecting the UK’s digital infrastructure and promoting economic growth.

With regards to regional strength, the South West of England in particular has quickly established itself as something of a cyber tech hub comprising nearly 200 firms with partners such as GCHQ in Cheltenham and the renowned universities of Bristol and Bath.

A Hot M&A Market

In terms of M&A it’s certainly a hugely exciting sector. According to Security Week, in 2024 there were 405 cyber security-related M&A deals globally, with the UK playing a prominent role. The UK saw 67 deals involving its companies, up from 48 in 2023, making it the second-most active country after the US. While global deal volume dipped slightly from prior years, the UK bucked this trend with a notable increase, reflecting heightened domestic and inbound interest.

And these are certainly not small deals. Eleven of the deals announced in 2024 exceeded $1 billion, including Gen Digital’s acquisition of MoneyLion ($1 billion), Mastercard’s acquisition of Recorded Future ($2.7 billion), Salesforce’s acquisition of Own ($1.9 billion), CyberArk’s acquisition of Venafi ($1.54 billion), Hg’s acquisition of AuditBoard ($3 billion), Thoma Bravo’s acquisition of Darktrace ($5.3 billion), and HPE’s acquisition of Juniper Networks ($14 billion). It’s worth noting that the HPE/Juniper deal may not go through.

So, if you are the owner of a cyber security business, is it the right time to seek investment or sell? Well the resounding answer to both is “Yes.” Although geopolitical events and Trump’s tariffs are creating huge volatility in equity and bond markets, which can be significant for certain industries, cyber security is prospering as it remains a key priority for all types of businesses and organisations. It will continue to attract investment as it continues to attract customers - witness the raft of emergency measures taken by the retail sector following M&S's recent hacking.

A rise in UK M&A activity is also expected in 2025 as strategic buyers seek broader offerings, while private equity is certainly looking to capitalise on the sector’s growth potential.

If selling is an option then having a long-term plan to gear your business towards your exit is key, instead of simply launching into a sale process. Nevertheless, the most important thing to remember is that it is vital you seek the advice of an experienced corporate finance advisor as soon as you start to even consider selling your business or seeking investment. It is likely you will leave a considerable amount of value on the table if you simply take the first offer without having sought proper advice. Like a good game of chess, you have to be able to think four or five or more moves ahead which is where a qualified corporate finance advisor will prove to be invaluable.

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Rob Starr is a Partner - M&A at Shaw & Co.

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If you'd like to discuss how Shaw & Co can help you sell, buy or fund the growth of a business, please book a meeting here

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