IonQ buys cybersecurity firm Elisity in $1.3B all-stock deal

IonQ (IONQ) disclosed on Monday that it is acquiring cybersecurity firm Elisity in an all-stock transaction worth up to $1.3B as the quantum computing industry comes of age.

IonQ shares fell 2.7% in premarket trading.

Elisity has more than 100 global customer deployments and deep CISO and security relationships, IonQ said in a statement. The deal will help IonQ gain access to a market segment worth more than $10B that is growing double-digits annually, the company added.

The transaction includes up to $150M in earnout opportunity subject to performance of the Elisity business. The number of IonQ shares issued will be determined at closing based on the volume-weighted average price of IonQ common stock for the 20 trading days prior to, but not including, the third business day before the closing date. They will be calculated at a price between $33.07 and $49.61 per IonQ share.

The deal is expected to close in the fourth quarter and is subject to customary closing conditions.

“With Elisity and its team as part of IonQ, we will be well positioned to help customers protect critical infrastructure and enterprise networks throughout the transition to the quantum era," said IonQ CEO Niccolo de Masi in a statement. "As I said first, Q-Day is coming much faster than predicted. IonQ is offering its customers a vertically integrated full-stack quantum platform across quantum computing, networking, sensing and cybersecurity. Just as adding SkyWater Technology expanded IonQ’s capabilities in chip design, fabrication and packaging, Elisity will bring proven enterprise policy enforcement scale and deployment experience to our quantum security strategy and will give IonQ a strong growth platform to serve customers and create value for our shareholders.”

“Our customers need to prioritize post-quantum cryptography initiatives while securing existing assets to keep essential operations running,” Elisity CEO James Winebrenner added. “With IonQ, we will be optimally positioned to partner with them to modernize their crypto-agility programs, accelerate post-quantum cryptography capabilities while advancing their holistic Zero Trust posture and deploy hybrid-cybersecurity solutions today that are prepared for the quantum future.”

The Elisity acquisition is IonQ's latest deal. The company closed its acquisition of chipmaker SkyWater Technology earlier this year.

Late last month, Bank of America started coverage on the quantum computing firm with a Buy rating and a $60 price target.