Firms unprepared for cyber attacks, says CISO report

BY Richard Summerfield

Two-thirds of chief information security officers (CISOs) feel their companies are unprepared for a cyber attack, according to a new report from Proofpoint Inc.

The company’s inaugural ‘2021 Voice of the CISO Report’ examines global third-party survey responses from more than 1400 CISOs at mid to large size organisations across different industries. Throughout the course of Q1 2021, 100 CISOs were interviewed in each market across 14 countries: the US, Canada, the UK, France, Germany, Italy, Spain, Sweden, the Netherlands, UAE, Saudi Arabia, Australia, Japan and Singapore.

According to the report, 66 percent of CISOs feel their organisation is unprepared to handle a cyber attack and 58 percent consider human error to be their biggest cyber vulnerability. These responses are particularly noteworthy given the mass migration of employees to remote working over an unprecedented 12 months. Many CISOs have struggled to create a sense of urgency and priority among employees. Security training and awareness remain a challenge. Accordingly, 66 percent percent of CISOs do not believe their organisations are prepared to cope with an attack.

“Last year, cybersecurity teams around the world were challenged to enhance their security posture in this new and changing landscape, literally overnight,” said Lucia Milică, global resident CISO at Proofpoint. “This required a balancing act between supporting remote work and avoiding business interruption, while securing those environments.”

She continued: “With the future of work becoming increasingly flexible, this challenge now extends into next year and beyond. In addition to securing many more points of attack and educating users on long-term remote and hybrid work, CISOs must instill confidence among customers, internal stakeholders, and the market that such setups are workable indefinitely.”

However, despite many of the concerns voiced by CISOs regarding preparedness, many CISOs do feel adequately prioritised from a budget standpoint. The majority of global CISOs expect budgets to increase by at least 11 percent in the next two years. Sixty-five percent believe their companies will be better able to resist and recover from cyber attacks by 2022/23.

Report: 2021 Voice of the CISO report

Driverless truck start-up Plus goes public in $3bn SPAC deal

BY Fraser Tennant

In a $3.3bn deal that will make it a publicly traded company, self-driving truck technology start-up Plus is to merge with special purpose acquisition company (SPAC) Hennessy Capital Investment Corp. V (HCIC V).

Under the terms of the definitive agreement, Plus’s existing shareholders will convert 100 percent of their ownership stakes into the combined company and are expected to own approximately 80 percent of the post-combination company at close.

Furthermore, the merger is expected to deliver up to approximately $500m in gross proceeds at closing, including approximately $345m of cash held in HCIC V’s trust account from its initial public offering (IPO) in January 2021.

“This transaction enables us to continue growing our business globally, so that fleets and drivers can benefit from our revolutionary technology and usher in a new generation of innovation,” said David Liu, chief executive and co-founder of Plus. “At the same time, the transaction introduces a partner that shares our focus on sustainable technology and infrastructure, is aligned on our growth and value creation objectives, and recognises the challenges trucking companies face today.”

To meet these challenges, Plus plans to roll out its Supervised Level 4 PlusDrive solution in 2021 and accelerate the development of its Level 4 fully autonomous system by the end of 2024.

“We are excited to partner with Plus on their mission to make long-haul trucking safer, cheaper and better for the environment,” said Daniel J. Hennessy, chairman and chief executive of HCIC V. “We look forward to collaborating with experts in automotive safety, self-driving technology, artificial intelligence, robotics, cyber security and product development, as Plus transforms the global freight market with a safe self-driving trucking system.”

The merger has been unanimously approved by the boards of directors of both Plus and HCIC V and is expected to close in the third quarter of 2021, subject to the satisfaction of the necessary regulatory approvals and customary closing conditions, including approval by HCIC V’s shareholders.

Mr Liu concluded: ”We look forward to working closely with the HCIC V team as we move to commercial deployment and deliver value for drivers, customers and shareholders.”

News: Self-driving truck startup Plus to go public through $3.3 bln SPAC deal

Over three quarters of FIs unprepared for LIBOR transition, reveals new report

BY Fraser Tennant

Over three quarters (77 percent) of financial institutions (FIs) do not have a comprehensive plan in place for transitioning from the London Interbank Offered Rate (LIBOR), according to new report by Duff & Phelps.

A key part of the financial services infrastructure, LIBOR is a globally recognised base rate for pricing loans, debt and derivatives and has been called the “world’s most important number”.

According to the report, based on a survey of private equity firms, professional service providers, hedge funds, banks and others, while 54 percent had identified LIBOR exposures, they had not yet taken necessary action to resolve their liability.

Furthermore, 58 percent of these firms had not catalogued transition provision and 42 percent said they were unsure of what to do next. Almost a quarter (23 percent) of the firms surveyed have not begun any formal processes to identify exposure, with 14 percent suggesting they would not be ready until Q1 2022 at the earliest.

“The LIBOR transition is one of the greatest regulatory-driven changes ever, and inevitably it requires complex planning, thought and analysis,” said Jennifer Press, a managing director at Duff & Phelps. “It is therefore quite surprising to see that just nine months away from the hard deadline, the majority of financial institutions who were polled do not have a comprehensive plan in place.”

A failure to adequately prepare for the LIBOR transition – which is due to take place on 31 December 2021 – could lead to significant risks for firms as contracts transition to alternative reference rates.

However, a third of respondents revealed a belief that they are on track, despite limited progress across the majority of the industry. However, the report notes that firms may be underestimating the extent and complexity of the work required for a successful transition.

“The results indicate that although the majority of firms have identified their LIBOR exposures, many have yet to formally catalogue the transition provisions,” said Marcus Morton, a managing director at Duff & Phelps. “There is a real fear that many are pinning their hopes on fallback provisions written within existing contracts. The reality is that fallback language may not suit each and every party, and in some cases, contracts will fail if such provisions are inadequate.”

Rich Vestuto, a managing director at Duff & Phelps, added: “Technologies such as natural language processing and artificial intelligence could go a long way to help firms fully understand their exposure, but they must start the process now.”

Report: LIBOR transition survey

Verizon Media sold for $5bn

BY Richard Summerfield

Verizon Communications has sold its Verizon Media assets, including AOL and Yahoo, to private equity giant Apollo Global Management in a deal worth $5bn.

Under the terms of the deal, Verizon will receive $4.25bn in cash from Apollo, along with preferred interests of $750m and a 10 percent stake in the unit. Verizon originally paid nearly $9bn for the pair. The divested unit, which was previously named Oath and renamed Verizon Media in 2018 when Verizon wrote off around half of the unit’s value, will now be called Yahoo when the deal closes, which is expected to be in the second half of 2021.

Verizon has been making moves to refocus its attention on its wireless networks and other internet provider businesses of late and has been selling off its media properties. Last year, the company sold HuffPost to BuzzFeed. It also recently sold off or shut down other media properties like Tumblr and Yahoo Answers.

“We are excited to be joining forces with Apollo,” said Guru Gowrappan, chief executive of Verizon Media. “The past two quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well positioned to capitalize on market opportunities, media and transaction experience and continue to grow our full stack digital advertising platform. This transition will help to accelerate our growth for the long- term success of the company.”

“We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms,” said David Sambur, senior partner and co-head of private equity at Apollo. “Apollo has a long track record of investing in technology and media companies and we look forward to drawing on that experience to help Yahoo continue to thrive.”

“Verizon Media has done an incredible job turning the business around over the past two and a half years and the growth potential is enormous,” said Hans Vestberg, chief executive of Verizon. “The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.”

Apollo has engaged in a number of transactions in recent months, announcing deals to acquire Michaels, a chain of crafting stores in the US, and the Venetian Resort in Las Vegas.

News: Verizon to offload Yahoo, AOL for $5 billion

COVID-19 drove down deals

BY Richard Summerfield

The uncertainty and chaos caused by the COVID-19 pandemic saw M&A deal volumes and values fall sharply in the first half of 2020, according to a new report from WilmerHale, though there was a stark improvement in the second half of the year.

The report – ‘M&A Report 2021’ – notes that the number of M&A transactions worldwide declined by 6 percent, from 48,613 deals in 2019 to 45,507 in 2020. Furthermore, global M&A deal value decreased by 15 percent, from $3.35 trillion to $2.83 trillion. The average deal size in 2020 was $62.3m, down 10 percent from $68.9m in 2019.

Of course, there were variations in deal volume and value across different regions. Both volume and value were up in the Asia-Pacific region, but fell most prominently in the US and Europe. In the US, deal volume fell by 14 percent, from 20,603 transactions in 2019 to 17,748 in 2020. US deal value also fell 26 percent, from $2.14 trillion to $1.58 trillion. The average deal size in the US fell by 14 percent, from $104.m to $89.1m. The number of billion-dollar transactions involving US companies decreased by 11 percent, from 296 in 2019 to 234 in 2020, while their total value fell by 27 percent, from $1.57 trillion to $1.15 trillion.

In Europe, the number of transactions fell for the fifth consecutive year, dropping 11 percent from 18,844 in 2019 to 16,738 in 2020. Total deal value fell by 3 percent, from $1.18 trillion to $1.15 trillion. On the other hand, the Asia-Pacific region saw deal volume increase by 11 percent, from 10,092 transactions in 2019 to 11,241 in 2020, while total deal value grew by 26 percent, from $721.1bn to $911.6bn.

Despite the lingering pandemic, the report paints a brighter picture for 2021. With falling valuations, an abundance of private equity dry powder and the re-emergence of SPAC deals, among other factors such as the rollout of COVID-19 vaccines, there are reasons to be optimistic about deal drivers in the second half of the year.

Report: M&A Report 2021