Schwarz Group, one of the world’s largest retailers, has acquired cybersecurity startup XM Cyber Ltd. in a deal worth $700 million.

The companies announced the acquisition this morning. Following the transaction, XM Cyber will continue to operate independently and its cybersecurity platform is set to retain the current brand and support structure.

Israel-based XM Cyber provides a platform that helps organizations identify and fix cybersecurity issues in their information technology systems. The startup says its software can continuously scan an IT environment for vulnerabilities such as insecure configuration settings. Moreover, the platform is capable of launching simulated hacking attempts to test a company’s cybersecurity posture.

One of the factors that makes protecting corporate networks difficult is that the IT environment of a large enterprise changes on a regular basis. New devices are provisioned, existing systems receive updates and user accounts are added and removed. 

Every infrastructure change in theory has the potential to create a vulnerability that can be targeted by hackers. However, IT teams often don’t have the resources to check each newly modified configuration setting and application manually to determine if it may pose an issue.

The ability of XM Cyber’s platform to continuously scan for vulnerabilities makes it possible to discover issues as they arise, the startup says. The platform’s features for simulating hacking attempted promise to further improve companies’ cybersecurity. According to XM Cyber, the simulations enable its platform to identify which of the outstanding cybersecurity issues in an environment are most urgent. 

Prioritizing vulnerabilities is valuable because, as a result of the large number of IT systems in the typical enterprise, there are often more issues than the IT department can fix at once. As a result, administrators must first tackle the cybersecurity problems that pose the highest risk. The faster the most urgent vulnerabilities are resolved, the less time hackers have to try to use them to launch a cyberattack.

The technology that Schwarz Group is gaining through the acquisition of XM Cyber will help the retailer boost its cybersecurity capabilities. Germany-based Schwarz Group is the world’s fourth-largest retailer, with about $140 billion in annual revenues as of last year and about 500,000 employees. The company operates the Lidl and Kaufland grocery chains, which between them have more than 12,000 stores worldwide. 

“XM Cyber brings deep technical understanding and innovation that perfectly complements our portfolio for advanced cybersecurity services,” said Schwarz Group Chief Information Officer Christian Müller. “Finding and closing security gaps from an attacker’s perspective is a disruptive approach to the way organizations can proactively protect their networks. XM Cyber’s solution builds on our strong IT security to further protect our customers, partners, and ourselves as a company.”

Schwarz Group’s purchase of XM Cyber continues a series of recent startup acquisitions in the cybersecurity ecosystem. Several of the other startups acquired in the last few months also focused on helping companies find cybersecurity issues in their networks. 

Ivanti Inc. in August bought RiskSense Inc., whose platform detects if a company’s infrastructure or applications contain known software vulnerabilities. Earlier, Microsoft Corp. acquired CloudKnox Security Inc. for an undisclosed sum. It provides software that helps companies secure administrator accounts and applications with the ability to access their cloud environments.

Image: XM Cyber