IBM Back on the Prowl in MA, Snaps Up Trusteer in Security

IBM is making a major new investment in cybersecurity, involving a Boston- and Tel Aviv-based startup. Big Blue (NYSE: IBM) said today it is acquiring Trusteer, a software company that specializes in protecting organizations against data breaches and financial fraud.

Terms of the deal weren’t given, although one report (sourced from Israel) pegs the price at $800 million-plus. If accurate, that would be a grand-slam exit, given that Trusteer has raised about $10 million from U.S. Venture Partners and other investors, according to public records.

The deal represents IBM’s 21st acquisition of a Massachusetts-based software company (or one with significant operations in the Bay State) in the past 10 years. Most recently, IBM bought Emptoris and Q1 Labs in late 2011.

In recent years, I’ve spoken with IBM vice president Mike Loria about the company’s acquisition strategy and with former M&A head (now with McKinsey) Moni Miyashita about the hard work of integrating acquired companies.

Trusteer was founded in 2006 and is led by CEO Mickey Boodaei. The company’s software focuses on endpoint cybersecurity—protecting computers and mobile devices from online threats like malware and phishing attacks. Its top customers are banks and financial institutions, which use the technology to help secure consumers’ accounts. Trusteer has roughly 200 employees, most of them in research and development in Israel.

As part of the acquisition, IBM is setting up a new cybersecurity software lab in Israel that will have 200-plus people (some from Trusteer, some from IBM). IBM has been investing quite a bit in the field in recent years, including its security systems division which was established in 2011-12, led by general manager and former Q1 Labs CEO Brendan Hannigan. Trusteer will be joining that division, according to a post by Hannigan, which gives more details on the planned integration.

A bigger trend is that the largest U.S. tech companies are increasing their investments in Israeli facilities and startups; in turn, more Israeli companies and entrepreneurs are setting up offices around Boston and the U.S. We’ll be keeping an eye on this dynamic, as it involves other big players like EMC, Intel, Qualcomm, Apple, Google, and Facebook.

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