ZeroFox acquires IDX to address emerging security challenges and goes public through a merger with LNFA

ZeroFox and L&F Acquisition Corp. (LNFA) announced that they have entered into a definitive agreement for a business combination that will result in ZeroFox becoming a publicly traded company with an expected equity value of approximately $1.4 billion, assuming no redemptions.

ZeroFox IDX

As part of the transaction, ZeroFox will acquire IDX, a digital privacy protection and data breach response services company, resulting in the creation of a cybersecurity provider addressing the full lifecycle of external cyber threats and risks for its customers. Upon closing of the transaction, the combined company will be renamed ZeroFox Holdings, Inc. and expects to be listed under the ticker symbol “ZFOX”.

Organizations are increasingly challenged by cybercriminal activity, with the number of employee and customer records compromised exceeding tens of billions annually. ZeroFox’s external cybersecurity solutions go beyond traditional threat intelligence to protect organizations from threats outside the firewall with AI-driven analysis, experienced intelligence analysts with unique dark web access, comprehensive breach response and adversary disruption services and a fully integrated App Library that connects with over 500 applications.

“Since ZeroFox was founded in 2013, we have helped companies address emerging security challenges caused by the transformational shift to a ‘digital everything’ world. This rapid digital transformation has made companies vulnerable to attackers, resulting in the highest breach rate the industry has ever seen,” said James C. Foster, Chairman and CEO of ZeroFox. “We believe that external cybersecurity must be a top three priority and part of the critical security tech stack for Chief Information Security Officers because perimeter firewalls and internal endpoint agents alone are not enough to protect company assets and customers.”

The ZeroFox Platform enables actionable intelligence to disrupt phishing, impersonations, malicious domains and data leakage across the public, deep and dark web, including pervasive cloud-based applications such as Zoom, Slack, Google, Facebook and other social media sites. The platform processes billions of data elements and protects tens of millions of digital assets around the world. With customers in over 50 countries and its blue-chip relationships, ZeroFox has proven capabilities to mitigate cyber threats across multiple industries in the public and private sectors.

“With this transaction, we are creating the industry’s first publicly traded company that is focused on providing an enterprise external cybersecurity SaaS platform,” added Foster. “We intend to leverage this growth capital to continue investing in our artificial intelligence capabilities, scaling our go-to-market efforts and expanding our world-class team. We believe this will create value for our existing and new shareholders whilst we focus on growth, expanding our triple-digit net retention and delighting our customers.”

IDX is the nation’s leading provider of external breach response services, protecting enterprises from associated risks with its proprietary digital protection and privacy platform. Together, IDX and ZeroFox will provide external threat protection capabilities and breach response services, a holistic offering for companies protecting against, or responding to, an external cyberattack. The combined company will have over 650 employees and serve nearly 2,000 customers including five of the Fortune Top 10 and the largest companies in media, technology, retail and energy. Collectively, over 90% of revenues will be recurring platform subscriptions.

“As the leader in digital privacy protection and breach response, the IDX privacy platform is trusted to address data breach risks by large multinational enterprises and government agencies alike,” said Tom Kelly, CEO of IDX. “Joining ZeroFox is the result of a long-standing partnership based on shared values, a vision for a safer digital world and strong alignment on the market opportunity. We look forward to leveraging our proven technology and deep tradecraft to support the mission of providing our combined customers with a platform and expanding set of capabilities.”

L&F Acquisition Corp. was formed to pursue a business combination with one or more businesses focused on technology and services in the governance, risk, compliance and legal sector. LNFA’s team has deep sector expertise as operators and investors across public and private markets, backed by experienced SPAC sponsor and globally recognized investment firm, Victory Park Capital.

“With its leading global position, seasoned management team and proven technology, ZeroFox is poised to capture a significant share in the growing, $51 billion external cybersecurity and digital protection market,” said Adam Gerchen, CEO of LNFA. “This is a transformational deal and I am excited to join the ZeroFox Board of Directors to help accelerate ZeroFox’s growth and integration with IDX in its new chapter as a public company.”

“We are excited to provide growth capital financing to help ZeroFox and IDX achieve the combined company’s long-term vision and expansion in the massive external cybersecurity market. We believe that ZeroFox’s unique value proposition and high-quality platform will enable the company to capture increasing demand for cybersecurity and privacy protection around the world,” said Andrew Weinstock, Senior Investment Professional of Monarch Alternative Capital.

Key transaction terms

Upon completion of the transaction, the combined company is expected to have a pro forma equity value of approximately $1.4 billion, assuming no redemptions, resulting in over $250 million of cash on the combined company’s balance sheet.

This reflects $175 million of cash held in LNFA’s trust account (assuming none of LNFA’s stockholders redeem their shares) as well as $170 million in financing led by Monarch Alternative Capital LP with participation from Victory Park Capital, Corbin Capital, as well as existing shareholders New Enterprise Associates, Highland Capital, Alsop Louie Partners, Blue Venture Fund, Peloton Equity, Forgepoint Capital and James C. Foster, Chairman and CEO of ZeroFox.

The proposed business combination has been approved by the Boards of Directors of ZeroFox, IDX and LNFA, and is subject to approval by LNFA’s stockholders, regulatory approvals and other customary closing conditions. The business combination is expected to close in the first half of 2022.

A more detailed description of the business combination and a copy of the Business Combination Agreement will be included in a Current Report on Form 8-K to be filed by LNFA with the United States Securities and Exchange Commission (the “SEC”). LNFA will also file a registration statement (which will contain a proxy statement/prospectus) with the SEC in connection with the business combination.


Stifel is serving as financial advisor and capital markets advisor and Venable LLP is serving as legal advisor to ZeroFox. DBO Partners is serving as financial advisor and Wilson Sonsini is serving as legal advisor to IDX.

Jefferies is serving as financial advisor and capital markets advisor and Kirkland & Ellis is serving as legal advisor to LNFA. Jefferies is acting as lead placement agent and Stifel is serving as co-placement agent on the PIPE. Stroock & Stroock & Lavan LLP is serving as legal advisor to Monarch Alternative Capital.

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