Raytheon, one of the nation’s largest defense contractors, has built up an extensive business in cybersecurity by growing its internal cyber skills and making over a dozen carefully chosen acquisitions. Cyber was a logical adjacency to expand into for a military contractor that needed to understand the field to protect its other products. Today, its semi-autonomous Forcepoint unit has become the second biggest private cybersecurity firm in the world, and is gradually eclipsing narrow-gauge competitors with enterprise-wide solutions in commercial cyber markets. What Raytheon Chairman and CEO Thomas A. Kennedy is really angling for, though, is the boost in valuation from investors that comes when a company is well positioned in a market growing at double-digit rates each year. Kennedy says Raytheon may IPO Forcepoint as a way of getting there, with the parent company maintaining a sizable stake in Forcepoint’s predominantly commercial business while concentrating national-security cyber operations elsewhere in the company. Whatever path he chooses, Kennedy’s foray into commercial cybersecurity looks assured of surpassing the growth rates in its traditional defense business. I have written a commentary for Forbes here.
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