- IronNet is transforming cybersecurity through Collective
Defense, a differentiated platform that uses AI-driven behavioral
analytics to detect new, non-signature-based cyberattacks, such as
SolarWinds/SUNBURST.
- IronNet’s unique cloud-based, scalable solution, IronDome,
analyzes threat detections across companies within an industrial
sector to identify broad attack patterns and provides anonymized
intelligence back to all customers in real time.
- This transaction is expected to drive further market adoption
of IronNet’s Collective Defense Platform in a growing $25B security
segment and accelerate its innovation-pipeline of additional
offerings.
- Pro Forma enterprise value of the combined company following
the merger is expected to be $927 million, implying a $1.2 billion
pro forma equity value.
- Transaction includes a $125 million fully-committed common
stock PIPE at $10.00 per share anchored by one of the world’s
largest institutional investors with participation from Emles
Advisors, Weiss Asset Management, and The Phoenix Insurance
Company. Existing IronNet investors Bridgewater Associates,
ForgePoint Capital, and Kleiner Perkins will be joined by the LGL
sponsor group to also invest in the PIPE, enhancing their long-term
commitment to IronNet.
IronNet Cybersecurity, Inc. (“IronNet”), an innovative leader
transforming cybersecurity through Collective Defense, announced
today that it has signed a definitive business combination
agreement with LGL Systems Acquisition Corp. (NYSE: DFNS), a
special purpose acquisition company formed to help advance domestic
and international defense. The transaction will allow IronNet to
accelerate its growth trajectory in the rapidly growing
cybersecurity market and to capitalize on strong demand for new and
more effective ways to defend against growing cyber threats. Upon
close of the transaction, the combined company will be renamed
“IronNet Cybersecurity, Inc.” and will be listed on the New York
Stock Exchange and trade under the ticker symbol “IRNT.”
IronNet merges industry-leading cybersecurity products with
expert service to create a platform designed to deliver the most
advanced, real-time cyber defense globally, protecting both private
and public sectors. Bringing together some of the best minds in
cybersecurity from industry, government and academia, IronNet was
created to more effectively defend enterprises, sectors and nations
against highly organized cyber adversaries and increasingly
sophisticated attacks that traditional security tools are
challenged to detect. IronNet’s Collective Defense platform, which
features proprietary and patented technology, detects cyber
anomalies and shares anonymized threat data in real time within a
secure ecosystem. This provides all Collective Defense members with
a previously unachievable level of visibility into potential
incoming threats.
“Today marks an important milestone as we work to advance
IronNet’s ability to defend enterprises, sectors and nations
against highly organized cyber adversaries and increasingly
sophisticated attacks. We face the beginning of a digital arms race
in which adversaries are using cybersecurity attacks as a tool to
wreak havoc, including destruction, intelligence-gathering, and
extortion – ultimately presenting an existential economic threat to
the public and private sectors. Compounding this problem,
organizations frequently must defend themselves, often with limited
resources, against well-funded nation state groups who plan, code
and attack in teams over long periods of time,” said GEN (Ret)
Keith Alexander, Chairman of the Board, Founder and Co-CEO of
IronNet.
“Cybersecurity attacks are increasing in volume and are costing
global industries billions of dollars annually, as evidenced by the
recent global attacks via SolarWinds and Microsoft software.
Sophisticated threat actors routinely target private companies’
networks with increasingly swift and complex tactics. Supply chain
and zero-day exploits are now part of the everyday business
lexicon, and ransomware attacks are targeting life safety critical
infrastructure. We believe we can solve that problem with a
differentiated solution that leverages AI-driven behavioral
analytics to detect attacks and shares that threat data among our
customers in real time so they can take action more quickly,” added
William Welch, Co-CEO of IronNet.
“IronNet is unparalleled in its approach to cybersecurity,
providing best in class technology applications, critical data, and
an experienced management team,” said Robert LaPenta, Co- CEO of
LGL Systems Acquisition Corp. “As it stands today, current methods
of cyber information sharing, analysis, and collective action are
simply too manual and too slow to be effective. Our LGL team is
very excited to partner with General (Ret.) Alexander, the
longest-serving head of the NSA and founder of US Cyber Command, in
helping steward his corporate vision to the New York Stock
Exchange. We believe this merger will make a real difference in
helping IronNet protect our fellow citizens from accelerating
aggression by an invisible enemy intent on hurting our
well-being.”
IronNet’s Collective Defense Platform consists of IronDefense
and IronDome. IronDefense is an advanced Network Detection and
Response (NDR) solution that provides behavior-based and AI-driven
analytics at the network level to detect anomalous activity at
individual enterprises and prioritize the highest threats in a
company’s network. The IronDome solution then provides a
crowdsource-like environment in which the IronDefense findings from
an individual company are automatically and anonymously shared at
machine network speed and cloud scale within the group of related
entities (portfolio companies, supply chains, industries, or
nations) for correlation and further analysis. This real-time
visibility to the threat landscape delivers timely, actionable, and
contextual insights to the attacks targeting an enterprise and
provides early warning to all members.
In addition, IronNet's professional cybersecurity services, are
led by security professionals and threat researchers who have
real-world experience with nation-state cyber operations. These
customer engagements deliver end-to-end security posture
evaluations that enable a customer's security team to exercise
their processes and technologies against a sophisticated but benign
adversary, identify new and novel threats in their networks, and
discover potential gaps.
IronNet believes that Collective Defense is the future of
cybersecurity and takes threat intelligence sharing to an
operational level. This one-of-a-kind platform represents a
radically different approach to cybersecurity, designed to break
down the silos that have made organizations around the world
vulnerable to destructive cyberattacks.
Transaction Overview
LGL Systems Acquisition Corp., which currently holds
approximately $173 million cash in trust, will combine with IronNet
at an estimated pro forma total enterprise value of $927 million.
Assuming no redemptions by LGL’s existing public stockholders,
IronNet’s existing stockholders will hold approximately 72% of the
fully diluted shares of common stock in the combined company,
IronNet Cybersecurity, immediately following the closing of the
business combination.
The combined company expects to receive approximately $267
million in net proceeds, assuming no redemptions by LGL’s existing
public stockholders, including proceeds from a $125 million PIPE
transaction. Cash proceeds are expected to be used to accelerate
IronNet’s revenue growth, to expand its product portfolio, and for
working capital to fund increasing demand.
The transaction has been unanimously approved by the board of
directors of both LGL and IronNet, and is subject to the
satisfaction of customary closing conditions, including the
approval of both parties’ stockholders, expiration of
Hart-Scott-Rodino waiting periods and the effectiveness of LGL’s
registration statement with the Securities and Exchange Commission
(SEC). The transaction is expected to close in the third quarter of
2021.
Additional information about the proposed transaction, including
a copy of the merger agreement and investor presentation, will be
provided in a Current Report on Form 8-K and in LGL’s registration
statement on form S-4, which will include a document that serves as
a prospectus and proxy statement of LGL, referred to as a proxy
statement/prospectus, each of which will be filed by LGL with SEC
and available at www.sec.gov.
Advisors
Guggenheim Securities, LLC is acting as exclusive financial
advisor and capital markets advisor to IronNet. Barclays is acting
as exclusive financial advisor to LGL. Barclays, BTIG, LLC,
Jefferies LLC and Needham & Company, LLC are acting as
placement agents and capital markets advisors to LGL. Cooley LLP is
acting as legal counsel to IronNet. Paul Hastings LLP is acting as
legal counsel to LGL. Sidley Austin LLP is acting as legal counsel
to the placement agents.
Investor Call / Management Presentation
A presentation made by the management team of both IronNet and
LGL regarding the transaction will be available today starting at
7:00 AM EST on the website of LGL. To access the conference call,
please visit www.dfns.ai or dial 1-844-512-2921 (international
1-412-317-6671) and enter password 1143965. LGL will also file the
presentation with the SEC in a Current Report on Form 8-K, which
will be accessible at www.sec.gov.
About IronNet
Founded in 2014 by GEN (Ret.) Keith Alexander, IronNet
Cybersecurity is a global cybersecurity leader that is
revolutionizing how organizations secure their networks by
delivering the first-ever Collective Defense platform operating at
scale. Employing a number of former NSA cybersecurity operators
with offensive and defensive cyber experience, IronNet integrates
deep tradecraft knowledge into its industry-leading products to
solve the most challenging cyber problems facing the world
today.
About LGL Systems Acquisition Corp.
LGL Systems Acquisition Corp. is a blank check company formed
for the purpose of effecting a merger with a target business in the
cybersecurity, C4ISR, data processing, and/or analytics sectors,
with a broad range of applications across the aerospace, defense,
and communication end markets.
Important Information About the Proposed Business Combination
and Where to Find It
This press release relates to a proposed transaction between LGL
and IronNet. In connection with the proposed transaction, LGL
intends to file a registration statement on Form S-4 with the SEC,
which will also include a document that serves as a prospectus and
proxy statement of LGL, referred to as a proxy
statement/prospectus. A proxy statement/prospectus will be sent to
all LGL shareholders. LGL will file other documents regarding the
proposed transaction with the SEC. Before making any voting
decision, investors and security holders of LGL are urged to read
the registration statement, the proxy statement/prospectus and all
other relevant documents filed or that will be filed with the SEC
in connection with the proposed transaction as they become
available because they will contain important information about the
proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by LGL through the website maintained by
the SEC at www.sec.gov. The information contained on, or that may
be accessed through, the websites referenced in this press release
is not incorporated by reference into, and is not a part of, this
press release.
Participants in the Solicitation
LGL and IronNet and their respective directors and executive
officers, under SEC rules, may be deemed participants in the
solicitation of proxies of LGL’s stockholders in connection with
the proposed transaction. LGL’s stockholders and other interested
persons may obtain, without charge, more detailed information
regarding the directors and officers of LGL in its Annual Report on
Form 10-K for the year ended December 31, 2020, which has been
filed with the SEC. Additional information will be available in the
definitive proxy statement/prospectus when it becomes
available.
Forward-Looking Statements
This press release includes "forward-looking statements" in the
meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. LGL's and
IronNet's actual results may differ from their expectations,
estimates and projections and, consequently, you should not rely on
these forward-looking statements as predictions of future events.
Words such as "expect," "estimate," "project," "budget,"
"forecast," "anticipate," "intend," "plan," "may," "will," "could,"
"should," "believes," "predicts," "potential," "continue," and
similar expressions (or the negative versions of such words or
expressions) are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, LGL and IronNet's expectations with respect to future
performance and anticipated financial impacts of the proposed
business combination, the satisfaction of the closing conditions to
the proposed business combination, and the timing of the completion
of the proposed business combination. These forward-looking
statements involve significant risks and uncertainties that could
cause the actual results to differ materially from those discussed
in the forward-looking statements. Most of these factors are
outside LGL's and IronNet's control and are difficult to predict.
Factors that may cause such differences include, but are not
limited to: the occurrence of any event, change, or other
circumstances that could give rise to the termination of the
agreement; the outcome of any legal proceedings that may be
instituted against LGL and IronNet following the announcement of
the agreement and the transactions contemplated therein; the
inability to complete the proposed business combination, including
due to failure to obtain approval of the stockholders of LGL and
IronNet, certain regulatory approvals, or satisfy other conditions
to closing in the agreement; the occurrence of any event, change,
or other circumstance that could give rise to the termination of
the agreement or could otherwise cause the transaction to fail to
close; the impact of COVID-19 on IronNet's business and/or the
ability of the parties to complete the proposed business
combination; the inability to obtain or maintain the listing of the
combined company's shares on the NYSE following the proposed
business combination; the risk that the proposed business
combination disrupts current plans and operations as a result of
the announcement and consummation of the proposed business
combination; the ability to recognize the anticipated benefits of
the proposed business combination, which may be affected by, among
other things, competition and the ability of IronNet to grow and
manage growth profitably and retain its key employees; costs
related to the proposed business combination; changes in applicable
laws or regulations; the ability of the combined company to raise
financing in the future; the success, cost and timing of IronNet's
and the combined company's product development activities; the
potential attributes and benefits of IronNet's and the combined
company's products and services; IronNet's and the combined
company's ability to obtain and maintain regulatory approval for
their products, and any related restrictions and limitations of any
approved product; IronNet's and the combined company's ability to
identify, in-license or acquire additional technology; IronNet's
and the combined company's ability to maintain IronNet's existing
license, OEM, and other application development agreements;
IronNet's and the combined company's ability to compete with other
companies currently marketing or engaged in the development of NDR
or other cybersecurity software and services offerings; the size
and growth potential of the markets for IronNet's and the combined
company's products and services, and each of their ability to serve
on those markets, either alone or in partnership with others;
IronNet's and the combined company's estimates regarding future
expenses, future revenue, capital requirements and needs for
additional financing; IronNet's and the combined company's
financial performance; and other risks and uncertainties indicated
from time to time in the final prospectus of LGL for its initial
public offering and the proxy statement/prospectus relating to the
proposed business combination, including those under "Risk Factors"
therein, and in LGL's other filings with the SEC. LGL and IronNet
caution that the foregoing list of factors is not exclusive. LGL
and IronNet caution readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
LGL and IronNet do not undertake or accept any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in its
expectations or any change in events, conditions, or circumstances
on which any such statement is based.
No Offer or Solicitation
This press release shall not constitute a solicitation of a
proxy, consent, or authorization with respect to any securities or
in respect of the proposed business combination. This press release
shall also not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of
securities in any states or jurisdictions in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of the Securities Act of 1933,
as amended, or an exemption therefrom.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210315005346/en/
For IronNet:
Investors: Michael Bowen and Ryan Gardella
IronNetIR@icrinc.com
Media: Phil Denning and Dan McDermott IronNetPR@icrinc.com
For LGL: Info@dfns.ai
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