Honeywell to Buy SCADAfence to Strengthen OT Security MuscleSecurity Vendor Will Provide Asset Discovery, Threat Detection to Industrial Firms
Honeywell plans to purchase an OT security vendor founded by Israel Defense Forces veterans to deliver asset discovery, threat detection and compliance management to industrial organizations.
The Charlotte, North Carolina-based conglomerate said its proposed acquisition of Tel Aviv, Israel-based SCADAfence will help Honeywell to provide an end-to-end enterprise OT cybersecurity offering to site managers, operations management and CISOs seeking enterprise security management and situational awareness. Terms of the deal, which is expected to close in the second half of 2023, weren't disclosed.
"SCADAfence is an ideal complement to Honeywell's OT cybersecurity portfolio," Honeywell Connected Enterprise President and CEO Kevin Dehoff said in a statement. "It enables us to provide an end-to-end solution with applicability to asset, site and enterprise. By enhancing our cybersecurity portfolio, we are accessing a growth engine and enabling customers to operate their OT environments more securely."
How SCADAfence Came Onto the Scene
SCADAfence was founded in 2014, employs 60 people and raised $39.5 million in six rounds of outside funding. The company most recently received $16 million in March from Fujitsu, Mitsubishi Electric and Prosegur. SCADAfence has roughly $10 million in annual sales - or $167,000 per employee - and is worth between $56 million and $76 million based on available funding and revenue data, IT-Harvest found (see: Honeywell's James DeLuccia on Product Security vs. IT Defense).
"We managed to turn the company around from an unknown brand to a company that is associated with excellence."
– Elad Ben-Meir, CEO, SCADAfence
The company was co-founded by Israel Defense Forces veterans Yoni Shohet and Ofer Shaked, who both left in early 2021 to establish and lead SaaS security remediation vendor Valence Security and evidence-based cyber defense vendor Deepblue Cybersecurity, respectively. Elad Ben-Meir joined the company as CEO in September 2018 after spending nearly four years as a vice president at threat intel provider Cyberint.
"Taking on my first CEO role almost five years ago, we managed to turn the company around from an unknown brand to a company that is associated with excellence, both in the tech we deliver and in how we serve our customers," Ben-Meir wrote on LinkedIn on Monday. Honeywell didn't respond to Information Security Media Group requests for additional comment.
What Bringing Honeywell, SCADAfence Together Does for Clients
SCADAfence will become part of Honeywell Connected Enterprise, which focuses on digitalization, sustainability and OT cybersecurity SaaS offerings and solutions. Honeywell has more than 500 employees worldwide focused specifically on OT security. It has delivered thousands of OT cyber projects in more than 130 countries over the past two decades, according to the company.
"This combination creates significant opportunity for growth, allowing us to combine our top-tier OT cybersecurity products with one of the world's leading companies in industrial software," Ben Meir said in a statement. "With this acquisition, we are poised to deliver some of the most advanced OT security technology to Honeywell's broad customer base."
Honeywell's cybersecurity offerings are part of the company's performance materials and technologies operating segment, which enjoyed a 7.1% increase in sales in 2022 to $10.73 billion. The segment's profitability improved over the same time frame by 11% to $2.35 billion. The SCADAfence deal will add more professional services, managed security services and software to Honeywell's OT cyber portfolio.
This is Honeywell's second security acquisition in recent years, coming more than six years after the firm purchased New York-based industrial cybersecurity vendor Nextnine for an undisclosed amount to protect industrial sites from cyberattacks and enable remote monitoring of assets. The firm partnered with Acalvio to detect known and unknown attacks across the OT environment in commercial buildings.