British security provider Sophos plans to acquire Dell subsidiary Secureworks in an all-cash transaction valued at approximately $859 million.

The deal, announced in a joint release on Monday, will grant Sophos control over Secureworks’ Taegis Extended Detection and Response (XDR) platform, a platform aimed at enhancing threat detection for medium to large enterprises.

Sophos, which has been under the ownership of private equity firm Thoma Bravo since 2020, hopes to finalize the deal by early 2025, contingent upon regulatory approval.

The acquisition is expected to broaden Sophos’ security offerings by integrating Secureworks’ XDR and security operations solutions with its own managed detection and response (MDR) capabilities.

According to Sophos CEO Joe Levy, this integration will create a more comprehensive security portfolio by leveraging artificial intelligence, advanced threat intelligence, and identity-based threat detection.

“This merger strengthens our market position and equips us with a combined toolkit to bolster security for a diverse customer base,” he said in a statement.

Financial Struggles at Secureworks

Secureworks, which counts around 1,500 employees, posted declining revenues and a net loss of $86 million in fiscal 2024, the latest in a string of financial challenges in recent years.

Originally acquired by Dell in 2011 and publicly listed in 2016, Secureworks has struggled to maintain growth, posting further losses in the first half of fiscal 2025.

The acquisition could help Sophos deliver a more comprehensive range of solutions, from identity threat detection and next-gen SIEM capabilities to operational technology (OT) security.

Dave Gerry, CEO at Bugcrowd, pointed out that given the gap in organizations’ ability to hire security talent, especially in small and medium sized businesses (SMBs), the drive towards leveraging managed-services providers continues to accelerate.

“Sophos has been a cybersecurity leader for decades and this combination with Secureworks further solidifies their position as a one-stop technology partner for their customers,” he said.

He added the acquisition of Secureworks by Sophos further cements Sophos as a leader in endpoint security, managed services and security consulting.

Stuart McClure, CEO of Qwiet.ai, said this deal looks like a “fill in the void” M&A for Sophos–an attempt to “instantly claim” relevancy.

“Sophos came from the legacy antivirus world and has struggled to grow and stay relevant in an EDR world,” he explained.

He pointed to the multiple players in the MDR/XDR space, adding that separating their offerings from the noise will be extremely challenging.

“Sophos has been desperate to compete in the solar systems of Palo Alto, Arctic Wolf, Crowdstrike and SentinelOne and rightly so,” McClure said.

From his perspective, the Secureworks acquisition is “vital” for Sophos to take market share and compete in this space.

“Knowing its core technology, it has a powerful potential to bring forward differentiation and innovation,” McClure said.

Looking forward to the M&A market in 2025, Gerry said the cybersecurity vendor landscape is currently far too fragmented.

“I expect that this is the first of many consolidation-focused M&A deals we will see in the next 12 months,” he said. “Customers are at a loss to understand the difference between vendors.”

Gerry predicted once readily available VC capital from the 2021-era is used up, organizations would look for exits to survive.