Leonardo beefs up cybersecurity business

Leonardo will strengthen its cyber solution portfolio by acquiring a 24.55% share in SSH Communications Security Corporation (“SSH”), a Finnish cybersecurity company. This investment, valued at 20 million EUR, is in line with Leonardo’s Industrial Plan – updated in March – and consolidates the company’s European leadership in Trusted Cyber Security. The initiative, which also makes Leonardo the only industrial investor in the Finnish company, also represents a significant step towards the development of a “Made in Europe” Zero Trust ecosystem. “Cybersecurity represents one of the strategic development areas of our industrial plan. With this acquisition, Leonardo increases its portfolio in an international perspective, positioning itself as a reference point to lead the Zero Trust revolution in Europe. The agreement combines SSH’s technological expertise with Leonardo’s technologies and solutions, advanced assets and services, and domain-specific knowledge. In an environment where threats evolve rapidly and regulations become more stringent, organisations increasingly need advanced future-proof solutions,” said Roberto Cingolani, Chief Executive Officer and General Manager of Leonardo. SSH, named after its Secure Shell protocol, is the reference standard for network communications. The company offers technologies for securing activities in hybrid cloud environments and in IT and OT infrastructures with solutions integrating proprietary quantum-safe encryption: it is the European leader in Privileged Access Management (PAM) for secure and dynamic access to critical systems, cloud environments and sensitive devices; it also has proprietary Wide Area Network (WAN) encryption solutions certified for government and military environments, designed to protect data traffic between remote sites, data centres and critical environments, and secure communication between systems, for strong authentication, advanced encryption and centralised key management. For more than 30 years, SSH has been protecting the critical systems of governments, institutions, leading companies, finance global organisations and critical infrastructures around the world with its solutions, through a network of partners in North America, Europe and Asia. In addition to the investment, Leonardo and SSH will enter into a partnership governed by a cooperation agreement that provides worldwide exclusivity for Leonardo to integrate SSH solutions within Leonardo’s wider Zero Trust offering, with the exception of the Scandinavian countries. The common goal is to build a secure digital future in which the “never trust, always verify” principle is concretely attainable with a “Made in Europe” ecosystem. Leonardo’s subscription of the 13,333,333 new shares in SSH is subject to (i) the approval by the extraordinary general meeting of SSH shareholders of, among other things, the authorisation of the share issue by the board of directors of SSH, (ii) confirmation under the Finnish rules on direct investments by foreign entities in Finnish defence companies (FDI), (iii) as well as other conditions typical in investment transactions of this nature. Leonardo was assisted by Deloitte as M&A financial advisor and by DLA Piper as legal advisor. Leonardo acquires Axiomatics Leonardo has taken another step in strengthening its position in the field of cybersecurity, enriching its portfolio of innovative proprietary products by taking over the Swedish company Axiomatics AB. The operation adds a key component in completing the company’s offering in the field of Zero Trust: a model of cybersecurity in which trust is never implicit, and every single system, network and data access must be constantly verified and protected. This approach, adopted by Leonardo’s Global Cybersecurity Platform (GCC Platform), permits a complete view of the entire digital environment (referred to as cyber observability), proactively anticipating increasingly evolved and pervasive threats. The acquisition completes the third industrial partnership and M&A operation in cybersecurity carried out by Leonardo in only a few months, in line with the Industrial Plan aimed at strengthening Leonardo’s international role. The Axiomatics operation is one of a series of strategic initiatives launched by Leonardo in the cybersecurity sector in the Nordic countries: a partnership agreement with the Danish company Arbit concerning security and fast data transfer solutions in multi-domain operations, the more recent signing of the agreement for the acquisition of a 24.55% share in the Finnish SSH Communications Security Corporation, and the purchase of a share in the Swedish start-up CanaryBit, specialising in confidential computing and AI security, consolidating Leonardo’s Zero Trust and Data Centric Security international portfolio. Founded in 2006 with headquarters in Stockholm, Axiomatics – also present in North America – is the only European player to offer a platform enabling Zero Trust architecture for authorisation management and data security with dynamic access control based on the ABAC (Attribute-Based Access Control) model. This solution allows to offer fine-grained and dynamic control when managing access to protected systems, in line with the requirements of mission-critical entities such as defence, government agencies and infrastructures. Leonardo’s acquisition of the company and integration with the company’s cybersecurity services and sales network will allow it to seize opportunities on this growing market, generating value for customers and partners around the world. Finalisation of the acquisition transaction of a 100% share in Axiomatics AB is subject to: (i) confirmation in accordance with several authorities, also including Swedish authorities, concerning direct investment by foreign entities in companies operating in the defence sector (FDI), as well as (ii) the other conditions typically applied to investments of this nature. Leonardo was assisted by PwC during the process. 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