Merged Exabeam and LogRhythm cut jobs, face lawsuit

Exabeam and LogRhythm – a pair of cyber security firms – finalized their merger on Wednesday, an occasion The Register understands was marked by swift job cuts and shareholder action to investigate the transaction.

While the now-combined entity has not confirmed how many jobs will go, one Reg reader reported that execs announced a 30 percent reduction in workforce during a Zoom meeting.

An Exabeam spokesperson declined to answer specific questions about the deal, and sent The Register the following statement:

Post merger, the new business will keep the Exabeam name, and former LogRhythm president Chris O'Malley will serve as CEO.

"Our unified company is poised to set a new benchmark in cyber security, delivering solutions that are not only robust and innovative but also deeply attuned to the real-world challenges you face," O'Malley wrote in a Wednesday blog post.

"Exabeam is committed to providing comprehensive, AI-driven security solutions that are not just an alternative, but a definitive upgrade over the convoluted offerings from large tech companies," he continued.

Former Exabeam CEO Adam Gellar will leave the new outfit. We're told he will drift away beneath a significant golden parachute.

Gellar first announced the merger with Thoma Bravo-owned LogRhythm in May.

Today's layoffs – mourned on LinkedIn, and then also used as a recruiting tool by other security shops – follow a 20 percent staff cut at Exabeam last October.

"This is two failing companies merging together to try to stay afloat and now under a [private equity] PE firm where most tech companies go to die," one Reg reader lamented. "The real issue is the zeroing out of all the employee stock."

Earlier this week, an Exabeam investor filed a legal demand to inspect its books, and LogRhythm's too, to stop the deal from proceeding. This lawsuit, according to an Exabeam spokesperson, was dismissed yesterday.

Then on Wednesday, the law firm of Kahn Swick & Foti (KSF) announced it is investigating the deal between Exabeam and LogRhythm.

"Under the terms of the now-completed transaction, Exabeam common stockholder's shares have been canceled for no consideration," the attorneys asserted in a statement.

"KSF is seeking to determine whether the merger and the process that led to it are adequate, or whether the merger is fair to Exabeam shareholders." ®