Cyber Defence M&A and Investment on the Rise in Spain

Cyber Defence M&A And Investment On The Rise In Spain

Cyber Defence M&A and Investment on the Rise in Spain

In the context of increasing incidents which put the security of public and private institutions at risk, cyber defence has become one of the main challenges for armed forces and security organisations.

In Spain, both the National Defence Directive and the National Security Strategy underline the need to strengthen all preventive, detection and response measures against cyber attacks. Last summer, the Defence Ministry set up the Joint Cyber Defence Command for the Armed Forces, with a budget of nearly five million euros, to tackle the challenge.

But why is cyber defence such a hot issue? Major international organisations’ increasing dependence on technology and web-based communications has raised the potential threat from an attack against computers and networks.

For example, cyber attacks are at the top of NATO’s agenda; the alliance deals with a wide range of threats against its networks on a daily basis.

Proactive cyber defence is key to mitigating operational risk, and will most often require additional security from Internet services providers. This is an industry which will create investment opportunities for Internet experts, as well as for security and defence companies.

SPAIN CYBER DEFENCE SECTOR RIPE FOR GROWTH

In the past few years, Spain has recognised the need to invest in research and development (R&D) and innovation in the cyber security sector to fuel growth and boost competition.

Innovation is the cornerstone of technology multinational Indra Sistemas, and it has developed its own solution for digital signature based on Public Key Infrastructure (PKI) technology. Last year, it won a contract to implement a PKI identification system for the Public Registry of Panama.

With three offices in Spain, Realsec is a privately-funded European technology company, which supplies cryptographic security systems for the private and public sectors.

Another home-grown firm fast building a reputation in the cyber defence industry is Duro Felguera. Keen to beef up the presence of its technology division in the security and defence business, the engineering group recently acquired Epicom from military communications specialist Amper for 4.6 million euros. Epicom is Spain’s top cryptographic systems company and one of the Spanish Armed Forces key suppliers.

MORE M&A LIKELY AMID SECTOR RESTRUCTURING

Duro Felguera’s purchase of Epicom was a timely and savvy move, taking advantage of Amper’s decision to sell non-core assets to strengthen its capital.

More M&A deals cannot be ruled out in Spain’s cyber defence sector, amid further restructuring and increased competition and with foreign players also likely to enter the ring in the medium-term. The government’s commitment to continued investment in the context of budget austerity will also be a key factor affecting the industry.

For information on Spain’s cyber defence industry, contact corporate law firm Argali Abogados.

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