WALTHAM, Mass., April 27 (UPI) -- Raytheon is investing $1.57 billion in the formation of a joint venture company to provide defense-grade cyber solutions for the global cyber-security markets.
The still unnamed new company is being formed with Websense, a portfolio company of Vista Equity partners, and will leverage Raytheon's advanced cyber-security technologies and Websense's industry leading TRITON information security platform.
"The market for advanced cyber solutions that protect and defend global industry and infrastructure is rapidly growing due to the sophisticated threats posed by well-funded, nation-state adversaries and criminal networks. As the business enterprise evolves to meet the networked demands of today's mobile and cloud economy, these threats will grow in size and scale," Raytheon Chairman and Chief Executive Officer Thomas A. Kennedy said. "The new joint venture will combine Raytheon Cyber Products and Websense capabilities to deliver the advanced, defense-grade technology solutions needed to meet this evolving threat."
Raytheon said the transaction for the new joint venture company is expected to close in the second quarter of this year. Under terms of the deal, Raytheon will contribute about $1.57 billion and own 80.3 percent of the company. It will also contribute $1.9 billion -- net of cash acquired -- to acquire Websense, of which $600 million will be in the form of an inter-company loan to the joint venture.
In addition, Raytheon will also contribute the assets of Raytheon Cyber Products and related intellectual property, which are valued at $400 million.
John R. McCormack, chief executive officer of Websense will be the new company's chief executive officer. Representatives of Raytheon and Vista Equity Partners will make up its board of directors.
"We believe the combination of Raytheon Cyber Products and Websense creates a strong foundation for growth in the cyber-security market, especially in light of the combined technical, product and multi-channel strengths each brings to the table," said Brian Sheth, co-founder and president of Vista Equity Partners. "We are excited to invest in this new venture as we clearly see its ability to accelerate growth and create value for all parties."
The announcement of the definitive agreement for the new company coincides with Raytheon's launch of its SureView product suite, which combines human and machine learning to prevent insider threats, reduce the amount of time an external threat remains in an organization's network, and provide actionable intelligence to help eliminate the threat of future attacks.
SureView portfolio evolved through capabilities Raytheon acquired and technologies developed in-house to protect its own traditional customer set and the company's systems and data. It is built on the idea that establishing an impenetrable perimeter is impossible and companies need to prepare to operate effectively through cyber-security breaches.
SureView products deliver a broad spectrum of integrated solutions that address a complex set of cyber-security challenges, including protection against insider threats and advanced threats; verifying the integrity of system memory; and applying an analytics platform to enable contextual awareness and cyber intelligence for rapid remediation.