Private equity firm Thoma Bravo has announced the merger of its security information and event management (SIEM) company LogRhythm with Exabeam, a competitor backed by major players like Cisco and Lightspeed Venture Partners in the cybersecurity industry.

SIEM involves using real-time data from servers, network devices, and applications to detect abnormal activity and prevent potential security threats from escalating. The cybersecurity sector is experiencing significant consolidation, with LogRhythm and Exabeam's merger news coinciding with Palo Alto Networks acquiring IBM's QRadar SIEM business. This is in addition to Cisco's recent acquisition of SIEM giant Splunk for $28 billion.

Across the cybersecurity industry, M&A activities are on the rise. Akamai's acquisition of API security company Noname for $450 million, Permira's purchase of a majority stake in BioCatch at a $1.3 billion valuation, and Thoma Bravo's takeover of Darktrace for $5 billion are some recent examples.

Furthermore, cloud security platform Wiz reached a $12 billion valuation with a $1 billion fundraising round, with plans to acquire other cybersecurity startups using the funds.

Prior to Thoma Bravo's majority stake acquisition in 2018, LogRhythm had raised approximately $126 million. Exabeam, on the other hand, raised nearly $400 million by its $200 million Series F round in 2021. The valuation of Exabeam at the time of the merger has not been disclosed by Thoma Bravo, with its previous valuation standing at $2.4 billion.

AI is becoming increasingly integral in the cybersecurity industry, with LogRhythm CEO Chris O'Malley highlighting Exabeam's AI-driven security solutions as a key factor in the merger.

The merger is expected to be finalized in Q3 2024, according to Thoma Bravo.