The Perimeter eSecurity Roll-Up Train Building Momentum

Posted on August 30th, by thinkstrategies in Goldman Sachs, managed security services, MSSPs, Perimeter eSecurity. Comments Off on The Perimeter eSecurity Roll-Up Train Building Momentum

On August 23, 2007, Perimeter eSecurity announced that it was acquiring USA.NET, a leading provider of secure eMessaging services. The announcement came just two weeks after Perimeter received a $50 million dollar commitment from Goldman Sachs, Bessemer Ventures and the Stripes Group.

Perimeter eSecurity, formerly Perimeter Internetworking, has become one of the largest independent managed security services providers (MSSPs) in the U.S. as a result of a series of acquisitions over the past three years. Here’s a quick chronology in reverse order:

  • In January 2007, Perimeter acquired Message Secure, a leading provider of managed security solutions to financial institutions and other businesses in the U.S.
  • In June 2006, Perimeter acquired ANE Technologies, a MSSP that provided security services to community banks and other financial organizations based in the Midwest.
  • In February 2006, Perimeter acquired Breakwater Security Associates, a leading provider of managed security services and information risk management, headquartered in Seattle, Washington.
  • In October 2005, Perimeter acquired the assets of US Networks Inc, a managed network and security services provider headquartered in Raleigh, NC.
  • In September 2004, Perimeter acquired Guarded Networks, a MSSP and security consulting firm headquartered in Fort Lauderdale, Florida.
  • In January 2004, Perimeter acquired iRW Services based in Charlotte, NC.

These acquisitions have given Perimeter eSecurity a nationwide footprint and portfolio of over fifty (50) on-demand managed security services, including Vulnerability Defense, Intrusion Defense, Network Defense, Email Defense, System Defense, and User Defense. The acquisitions have also enabled Perimeter eSecurity to grow its revenues 575% between 2001 and 2006.

The USA.NET acquisition will add over 1,300 clients to Perimeter’s existing customer base of 4,000. Almost half of Perimeter’s customers are in the financial services industry, dispelling the notion that this sector is adverse to offloading its security needs to third-parties.

The driving force behind these acquisitions and the company’s growing prominence in the MSSP market is Brad Miller, the company’s CEO. I had the privilege of meeting Brad and becoming familiar with the company back in 2003 when it was a little known regional player focused on the community banking sector. Brad joined the company in May 2000, coming from Wall Street with a determination to capitalize on the managed services model.

With many of the first generation of MSSPs being acquired by others–such as ISS by IBM, Guardant by Verisign, and Counterpane by BT–Perimeter has been able to use its own roll-up efforts to become a new leader in the MSSP market. Given the company’s track-record of success, access to cash and aggressive CEO, you can expect Perimeter eSecurity’s roll-up efforts to continue.

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