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PayPal to Acquire Cyber Security Firm CyActive for $60M - Analyst Blog

Per Israeli newspaper The Globes, e-commerce service provider eBay Inc. 's EBAY existing payment platform, PayPal is set to purchase CyActive, a cyber-security company for $60 million. The deal, on which both the parties declined to comment, is expected to close shortly.

CyActive is an Israeli firm founded in 2013 by its CEO Liran Tancman and CTO Shlomi Boutnaru and specializes in cyber security. The firm claims to forecast and prevent future cyber attacks by analyzing past attacks and offers companies services such as utilities detection and prevention.

The firm received a strategic investment from the venture capital unit of Siemens in September and has only raised $2 million up till now. Siemens joined Jerusalem Venture Partners (JVP), an Israeli venture capital firm, in investing in CyActive.

This is PayPal's second acquisition in Israel, following that of FraudSciences in 2008 for $169 million. FraudSciences is a financial fraud detection provider.

The increasing adoption of smartphones, tablets and other mobile Internet devices has propelled growth substantially in the industry. Consumers now prefer the convenience of ordering and paying online from the comforts of their home over the hassles of shopping at brick-and-mortar stores. Consequently, the use of online payment services has also ramped up.

But online activities remain vulnerable to cyber-attacks. For this online security has become a major concern for all. It is expected that the security threat landscape to continue to remain in 2015. So the companies need to invest in their security programs to achieve the minimum level of protection.

Amid the growing number of cyber attacks, corporations and companies are looking for stricter and more stringent cyber security measures to plug the loopholes in the system.

eBay is a forerunner in mobile payments and PayPal has consistently supplemented online payments with offline payment solutions.

As eBay will soon be spinning off PayPal, it has already taken necessary measures to strengthen the marketplace business for both the companies, beginning with the fixed price format, moving on to wooing big sellers and customers, improving the technology and navigation of its properties, investing in better fulfillment services and focusing specially on mobile customers. Its drive to provide complete online solutions for traditional retailers should further complement this growth. The latest acquisition can be deemed as a move to provide improved trust and safety across its sites.

Currently, eBay carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include PetMed Express, Inc. PETS , Autobytel Inc. ABTL and EVINE Live Inc. EVLV .While PetMed and Autobytel sport a Zacks Rank #1 (Strong Buy), EVINE Live carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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