IronNet Cybersecurity, Inc. has signed a definitive business combination agreement with LGL Systems Acquisition Corp., a move that enables the first company to accelerate its growth trajectory in the cybersecurity market and join the New York Stock Exchange and trade.
LGL Systems Acquisition Corp. is a special purpose acquisition company formed to help advance domestic and international defense. Upon close of the transaction, the combined company will be renamed IronNet Cybersecurity, Inc. and will be listed on the NYSE under the ticker symbol IRNT.
The 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. The transaction has been unanimously approved by the boards of directors of both companies. The transaction is expected to officially close in the third quarter of 2021.
“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,” said retired Gen. Keith Alexander, chairman of the board, founder and co-CEO of IronNet.
As the nation faces the beginning of a digital arms race where adversaries are using cyber attacks as a tool to destruct, gather intelligence and extort, Alexander said this could present 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,” he added.
IronNet’s Collective Defense platform detects cyber anomalies and shares anonymized threat data in real-time within a secure ecosystem, so all Collective Defense members have visibility into potential incoming threats.
“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.
“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,” LaPenta continued. “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.”
The Collective Defense Platform consists of IronDefense and IronDome. IronDefense is an advanced network detection and response solution that provides behavior-based and artificial intelligence-driven analytics at the network level to detect anomalous activity at individual enterprises. IronDome analyzes threat detections across companies within the industrial sector to identify attack patterns and provide intelligence in real time.
The transaction includes a $125 million fully-committed common stock PIPE at $10 per share. Additional participants include 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.
The combined company expects to receive approximately $267 million in net proceeds, and cash proceeds are expected to be used to accelerate IronNet’s revenue growth, expand its product portfolio and for working capital to fund increasing demand.