BC Partners and Medina Capital have agreed to acquire Brainspace Corp., an investigative analytics firm, as part of a joint venture to form a new cybersecurity company. The deal, with undisclosed terms, is expected to close in early 2017.
Brainspace develops machine-learning software that derives meaning from human communications, useful for digital investigations and data analysis. Medina Capital invested in the Addison, Texas-based target in August 2013. Brainspace’s technology provides cybersecurity and defense intelligence services used by companies such as Ernst & Young LLP, KPMG LLP, PricewaterhouseCoopers LLP, and LexisNexis Group. The target was founded in 2005 by David Copps and Chris Rohde, then operating as PureDiscovery.
The Brainspace deal is part of a partnership between private equity firms Medina Capital and BC to form a new cybersecurity business. The joint venture will combine 57 data centers from Medina Capital’s portfolio of security and data analytics companies, including: Cryptzone, Catbird, Easy Solutions, and Brainspace. The new company will be led by Medina Capital's managing partner Manuel Medina and the former senior leadership team of Terremark Worldwide Inc., a cybersecurity and infrastructure business purchased by Verizon in 2011. Branding for the new company has not been announced.
Medina Capital, based in Coral Gables, Florida, is a private equity investment firm that focuses on cybersecurity, big data analytics and cloud computing companies. The PE firm invests in North American businesses and companies in Europe and Latin America looking to expand in North America.
BC Partners is an international private equity firm based in London with approximately $13 billion in assets under management. BC Partners currently invests in companies such as: PetSmart Inc. (Nasdaq: PETM), Accudyne Industries LLC, and Mergermarket Group.
Cybersecurity companies are continuing to draw dealmakers as hackers have begun targeting government agencies, large corporations and election campaigns. Related deals include: Aon Risk Solutions’ (NYSE: AON) agreement to buy Stroz Friedberg Inc.; Accenture Plc’s (NYSE: CAN) purchase of cybersecurity company Maglan; Symantec Corp.’s (Nasdaq: SYMC) agreement to buy Blue Coat Systems Inc. for $4.65 billion in cash. LionTree Advisors is acting as financial advisor to BC Partners, while Greenberg Traurig is serving as legal advisor to Medina Capital.