The planned General Dynamics purchase of Fidelis Security Systems might look like a case of a giant buying a cyber upstart to reduce competition, but executives said that is not what's happening here.
"This is really not about swallowing Fidelis, this is about giving it some resources to enable it to grow," said GD's John Jolly.
The companies announced an agreement Aug. 20 to purchase Fidelis at a price they are not yet revealing. Executives said the deal is 99.99 percent likely to be finalized.
Once that happens, the 70-employee company will be called GD Fidelis Security Systems and it will retain its offices in Bethesda, Md., and Waltham, Mass. "We are not planning any personnel moves as part of this," Jolly said.
Jolly and Fidelis President CEO Peter George discussed the acquisition in a telephone interview with Deep Dive.
Experts from General Dynamics already work closely with the intelligence community to respond to network threats and produce intelligence. What GD does not have is malware-detection software to sell along with those services.
That's where Fidelis will come in. The company's software inspects network traffic for evidence of malware and then blocks attempts by hackers to communicate with their handy work via network ports.
"When a bad guy wants to exfiltrate classified information, we can see that going outbound and do something about it," George said.
Depending on how things go in Congress, the timing of the acquisition could be fortuitous for GD. The company does not publicly take sides on pending legislation, but a cybersecurity bill introduced by Sen. Joseph Lieberman, I-Conn., would provide incentives for private companies to buy exactly the kind of software made by Fidelis.
Not surprisingly, Fidelis has been a strong supporter of S.3414, the Cybersecurity Act of 2012. "Having nation states steal our intellectual property is a national security issue," George said.
On Aug. 2, the Senate fell short of the 60 votes necessary to move the legislation forward to a final vote, but George said he hopes the Senate will revive the proposal after the presidential election.