The number of personal records exposed in data breaches worldwide nearly doubled to 169 million in 2015, according to the Identity Theft Resource Center. That surge has fueled strong demand for cybersecurity services. Research firm Markets and Markets estimates that the global cybersecurity market will grow from $106.3 billion in 2015 to $170.2 billion by 2020.
Yet that market remains heavily fragmented, with companies offering different bundles of services. Meanwhile, many cybersecurity stocks were crushed over the past year due to concerns about their high valuations in a choppy market. The PureFunds ISE Cyber Security ETF (NYSEMKT:HACK), which contains a basket of these top stocks, has fallen more than 20% over the past 12 months. These two factors have fueled speculation that the entire cybersecurity sector could undergo a major consolidation later this year. Let’s take a look at two big buyouts which could occur if that happens.