General Dynamics nabs networking cybersecurity vendor Fidelis

Contact: Ben Kolada

General Dynamics on Monday announced the acquisition of network security vendor Fidelis Security Systems. Fidelis’ customer profile and proximity to security operations at federal agencies appealed to General Dynamics as the defense giant looks to expand its cybersecurity capabilities against several competitors that have already announced inorganic moves in this market.

General Dynamics isn’t disclosing terms of the all-cash deal, but did say that Fidelis has approximately 70 employees. When we last wrote about Fidelis in February 2011, we noted that it had 52 employees and that its average deal size had steadily grown from $200,000 in 2008 to $350,000. At the time, the company had 62 customers (up from 21 in 2008).

We’ve written before about traditional military contractors moving toward cybersecurity as the government cuts back on traditional military spending. In June, Northrop Grumman printed a similar transaction, reaching for Australian network security systems integrator M5 Network Security. And in October 2011, ManTech International announced that it was acquiring network, security and systems integration and software development vendor Worldwide Information Network Systems for $90m. General Dynamics also bought Fortress Technologies, which provides wireless mesh network access points and software that enable US defense agencies to establish secure wireless LAN connections, in July 2011. We’ll have a full report on this deal in an upcoming Daily 451.

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