ManTech International [MANT] on Wednesday said it has sold its commercial cyber security product business to CounterTack, which provides endpoint detection and response (EDR) capabilities, but is keeping a foothold in the business by taking a minority share in CounterTack.

Terms of the deal were not disclosed, but the ManTech Cyber Solutions International (MCSI) products business that ManTech divested only had about $5 million in annual sales and 40 employees.iStock Cyber Lock

For ManTech, the divestiture allows it to focus on its core strength in the cyber security market of providing services, primarily to federal government customers, Stuart Davis, executive vice president of Strategy, told Defense Daily in an interview. The resources ManTech previously put into product development and the MCSI sales force will now go toward the services business, he said.

ManTech’s commercial cyber services business is less than 5 percent of its overall cyber services business, Davis said. ManTech’s cyber and intelligence business is about $750 million annually, with less than half of that coming from its cyber security services portfolio, he said.

As part of the deal, ManTech has obtained a minority stake in CounterTack and L. William Varner, president of ManTech’s Mission, Cyber and Intelligence Solutions Group, will joint the company’s board of directors as an observer. ManTech’s investment in CounterTack is $3.8 million, Tom Bain, vice president of Global Marketing & Security Strategy, told Defense Daily via an email response to questions.

“Investing in CounterTack offers ManTech potential upside in high demand cyber products, specifically next-generation endpoint security, and enables us to focus on our core strength in cyber services,” George Pedersen, chairman and CEO of ManTech, said in a statement.

In June, ManTech bolstered its cyber security services business with the acquisition of Knowledge Consulting Group. ManTech provides cyber security services across the spectrum of capabilities, including defense, exploitation and attack, Davis said.

The MCSI business’ key products are Active Defense, a malware detection and analysis platform for the enterprise, and Responder Pro, an in-memory forensics, malware analysis and reverse engineering tool for incident responders. These products, combined with CounterTack’s Sentinel big data endpoint detection and response platform for the enterprise, provide greater capabilities and new customers in the endpoint detection and response market.

“We’re thrilled to have MCSI and its innovative products as part of CounterTack to deliver cutting edge EDR technology, and expand our dramatically larger EDR customer footprint against CrowdStrike and others,” Neal Creighton, president and CEO of Massachusetts-based CounterTack, said in a statement. “The powerful combination of real-time operating system surveillance with in-memory threat analysis capabilities positions CounterTack as a clear market leader, and we look forward to driving more value for our customers with new products and services.”

Bain said that MCSI’s Responder Pro “is perhaps the most robust in-memory analysis engine in existence, in the EDR market.” Combined with CounterTack’s capabilities “to continuously monitor the operatin system across ser4vers, laptops and desktops…we can cover the entire cyber kill chain,” he said.

Bain also said the deal gives his company scale as every EDR vendor is either making acquisitions or obtaining capital infusions.

CounterTack’s main customer base is in the commercial market. About 60 to 70 percent of MCSI’s products are sold to the federal government, including some Defense Department customers, so the deal is “accelerating our path into the Fed,” Bain said.

CounterTack said the acquisition follows its recent $15 million credit funding led by TenEleven Ventures and other new investors, including EDBI, which is the corporate investment arm of the Singapore Economic Development Board, along with existing investors.

ManTech did not use a financial adviser on the deal.