IBM splurges $1 billion for Israeli cyber security firm Trusteer

International Business Machines (IBM), the world's biggest technology services company, yesterday agreed to buy Israeli Internet security services provider Trusteer, for a reported $1 billion.

The New York-based company did not disclose the financial details of the transaction, but several media reports said Big Blue had paid close to $1 billion.

Tel Aviv-based Trusteer provides cyber security software and threat intelligence solutions that help protect companies against financial fraud, malware and data breaches.

Founded in 2006 by Mickey Boodaei with backing from US Venture Partners and Shlomo Kramer, Trusteer generates annual revenues of about $40 million.

Its clients include global organizations such as HSBC, Santander, SunTrust, Fifth Third and leading online bankers such as First Data, Harland Financial Solutions, Intuit and S1 integrate.

Trusteer claims that seven of the 10 top US Banks, nine of the 10 top UK Banks, four of the five top Canadian Banks and two of the top four Australian Banks use its software.

As part of the proposed acquisition, IBM will form a cyber security software lab in Israel that will bring together more than 200 Trusteer and IBM researchers and developers to develop advanced threat, malware, counter-fraud, financial crimes and mobile security solutions.

The deal will reinforce IBM's plan of beefing up its fraud and malware protection portfolio after it acquired Massachusetts-based security intelligence software company Q1 Labs in 2011, for an undisclosed sum. (See: IBM targets $94-bn security software market through Q1 Labs acquisition)

In 2011, it had also acquired UK-based security analytics software firm i2, and Toronto-based risk analytics software firm Algorithmics.

IBM said that with this agreement, Trusteer's solutions will integrate and compliment its own security offerings in the areas of fraud protection, advanced persistent threat protection, zero-day vulnerabilities, endpoint security and threat intelligence services,and strengthen its leadership in the growing enterprise cyber security market.

In line with IBM strategy, the company said that it will continue to support and enhance Trusteer's clients and technologies and incorporate Trusteer into its Security Systems business within Software Group.

IBM will combine its Israel security research and development capabilities along with Trusteer research in Tel Aviv to form an IBM cyber-security software lab.

The deal is subject to customary closing conditions and is expected to close in the third quarter of 2013.