Dive Brief:

• German retailer Schwarz Group, owner of the Lidl and Kaufland supermarket chains, has acquired Israeli cybersecurity firm XM Cyber, the companies announced in a joint press release Monday.
• Schwarz Group plans to operate XM Cyber, which specializes in simulating potential attacks on online infrastructure, as an independent unit that will continue to serve other customers.
• The acquisition comes as food retailers deal with continued threats from cybercriminals intent on disrupting their operations.

Dive Insight:

Schwarz Group's decision to buy XM Cyber reflects the heavy reliance supermarket operators, like other organizations, place on interconnected information technology systems to manage their businesses.

XM Cyber's expertise in deflecting attempted cyberattacks on hybrid cloud networks, which meld IT systems on company premises with remote servers, was an "essential aspect of this strategic acquisition for the Schwarz Group," according to the press release.

"We continuously extend our range of digital products for our customers, for example, our online shops, our marketplace, or our loyalty programs," Rolf Schumann, chief digital officer of Schwarz Group, said in a statement. "With the solutions of XM Cyber, we offer our customers even more services and evolve the shopping and customer experience in a more holistic way."

Successful attacks on IT facilities can have costly repercussions for retailers. For example, when data transfer company Accellion suffered a data breach last December, systems operated by Kroger were exposed, allowing unauthorized access to sensitive information about employees, pharmacy records and other data.

In July, Swedish grocer Coop had to close more than half of its stores after an online attack shut down checkout systems, the BBC reported. Meanwhile, e-commerce systems run by U.K. supermarket operator Tesco were knocked out of commission by cyberattackers in October, according to The Guardian.

XM Cyber said its alliance with Schwarz Group, which operates grocery stores in Europe, the United States and Asia, will help it expand. "With the backing and international footprint of the largest European retailer, we can accelerate innovation and growth and further strengthen our position in the global cybersecurity market," said Noam Erez, XM Cyber's co-founder and CEO, in a statement.

Schwarz Group and XM Cyber did not disclose the value of the transaction, but multiple media reports have pegged the price at $700 million. XM Cyber raised $17 million in a Series B funding round in mid-2020 that at the time brought the total amount it had raised to $49 million.