Mitsubishi Electric Corporation announced Tuesday it will acquire the remaining 93% stake in Nozomi Networks Inc. for $883 million, marking one of the largest deals in the industrial cybersecurity sector as manufacturers scramble to protect connected factories from cyberattacks.
The Japanese conglomerate already owns 7% of the San Francisco-based firm following an investment during Nozomi’s $100 million funding round in March 2024. The transaction values the entire company at approximately $1 billion and should close by year-end, pending regulatory approvals.
Nozomi specializes in operational technology security, protecting the computer systems that control manufacturing equipment, power grids and other critical infrastructure. The company reported revenue of $74.7 million in 2024, up from $62.6 million the previous year, while maintaining gross profit margins exceeding 70%.
The acquisition comes as cyberattacks targeting industrial systems escalate. Recent incidents including ransomware strikes on energy infrastructure have highlighted vulnerabilities in operational technology networks that were traditionally isolated from the internet but are increasingly connected to boost efficiency.
Mitsubishi Electric, which posted revenue of ¥5.52 trillion ($36.8 billion) in its most recent fiscal year, has been developing what it calls a “One-Stop OT Security Solution” by combining its industrial equipment expertise with cybersecurity capabilities gained from serving financial sector clients.
The operational technology security market is experiencing rapid expansion, with various analysts projecting compound annual growth rates between 16% and 25% through 2030. Market research firms estimate the sector could reach $95 billion in value by decade’s end, driven by digital transformation initiatives and rising cyber threats.
Founded in 2016, Nozomi employs 315 people and will continue operating independently from its San Francisco headquarters while maintaining research operations in Switzerland. The deal structure involves a reverse triangular merger through a Mitsubishi subsidiary established specifically for the transaction.
Industry consolidation has accelerated recently, with competitors including Armis acquiring OTORIO in March and Dragos partnering with Yokogawa Electric. The deals reflect growing investor interest in cybersecurity firms that specialize in protecting industrial control systems from sophisticated threat actors.
