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Telefonica Ups Cybersecurity Business With Govertis Purchase

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Telefonica, S.A. (TEF - Free Report) recently announced that its cybersecurity arm, ElevenPaths, acquired Govertis to strengthen its foothold in the security and regulatory compliance across global markets. Apart from ensuring cyber resilience, the buyout complements ElevenPaths’ integration and management capabilities and aims at bolstering Telefonica’s security consulting services, thereby emerging as a comprehensive security partner for its customers.

As one of the world’s largest advisory firm in Latin America, Govertis offers best-in-class IT compliance, cybersecurity and risk management services. The company primarily caters to the management and legal compliance needs of both public and private sectors. Supported by a streamlined legal framework, the security services company specializes in technology governance, business continuity and tactical consulting. Interestingly, Govertis’ relationship with Telefonica dates back to 2012 and was firmly established in 2015 when the company’s regulatory compliance platform — GesConsultor GRC — was acquired by the Spain-based carrier.

From then on, the close-knit relationship between the companies strengthened exponentially with Telefonica acquiring an equity stake in Govertis through Wayra. Markedly, Wayra is a Telefonica initiative that reinforces innovations of various entrepreneurs with a portfolio of more than 400 startups. With the recent acquisition of Govertis, Telefonica is likely to stimulate its leadership in cybersecurity services with extensive geographical footprint in Latin America and Spain. On the back of such dedicated endeavors, the strategic alliance is reckoned to be a perfect complement to ElevenPaths’ business operations.

Few months back, Telefonica bolstered IoT security by fortifying its relationship with cybersecurity services provider — Nozomi Networks. The investment was made through Telefonica’s corporate venture capital arm — Telefonica Innovation Ventures. With the investment, Telefonica enhanced operational reliability by providing best-in-class protection to critical assets amid evolving cyber threats. The deal followed a joint services agreement between ElevenPaths and Nozomi Networks earlier this year. The partnership expanded Telefónica Innovation Ventures’ portfolio of investments in 11 startups, thereby reinforcing its commitment to provide risk management capabilities for critical infrastructure customers.

Equipped with a portfolio of future centric digital services, Telefonica provides a comprehensive suite of service platforms for fast go-to-market launches. Its IoT connectivity platform has been specifically designed to address dynamic business requirements and enable a cost-effective solution to improve business productivity. In the past few years, the company invested heavily in the deployment and transformation of its network to provide seamless connectivity with enhanced capacity, speed, coverage and security. With its operations across 17 countries, the Spain-based telecom company is successfully capitalizing on the opportunities in the digital world through several growth strategies to enhance long-term prospects, while experiencing healthy traction in the smartphone market.

Telefonica currently has a Zacks Rank #3 (Hold). Its shares have plunged 38.3% compared with the industry’s decline of 12.7% in the past year.



Some other better-ranked stocks in the broader industry are Deutsche Telekom AG (DTEGY - Free Report) , Shenandoah Telecommunications Company SHEN and MYR Group Inc. (MYRG - Free Report) . While Deutsche Telekom sports a Zacks Rank #1 (Strong Buy), Shenandoah and MYR Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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MYR Group has a trailing four-quarter earnings surprise of 33.1%, on average.

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