As the demand for Internet security continues at all levels of government, specialized cybersecurity contractor work and niche security companies are experiencing rapid growth.

Government contractors in fast-growing security niche segments are experiencing faster growth than generalized companies. Because of this, numerous specialized cybersecurity companies have enjoyed a higher cost of sale recently, according to an article in Washington Technology.

Larger, typically generalized companies in the federal market have been aggressively positioning themselves as leaders in the cybersecurity market by acquiring smaller companies. And as these smaller security companies enter the merger and acquisition market, the competition to acquire them has enabled sellers to secure higher prices and other favorable terms and conditions.

Examples of these deals include the sale of ArgoTek Inc. to Cobham plc, Seismic LLC to Applied Signal Technology Inc., SystemWare Inc. to CACI International Inc., Assured Decisions LLC to SafeNet Inc., Emerging Technologies Group Inc. to ManTech International Corp. and Crucial Security Inc. to Harris Corp.

Also, companies that have developed proprietary cybersecurity technology that is scalable, repeatable and has been effectively implemented and proven are in high demand. Sales of these companies often exceed three times the revenue of services companies. Examples of these transactions include the sale of eXMeritus Software Federal Systems Inc. and Narus Inc. to Boeing Co., SI Government Solutions to Raytheon Co., Cyveillance Inc. to QinetiQ North America and Cloudshield Technologies Inc. to Science Applications International Corp.