CYBERSECURITY MARKET UPDATE - Evergreen · Cybersecurity Market Update | 4 CYBERSECURITY M&A...
Transcript of CYBERSECURITY MARKET UPDATE - Evergreen · Cybersecurity Market Update | 4 CYBERSECURITY M&A...
CYBERSECURITY MARKET UPDATE
January 2018
Cybersecurity Market Update | 2
CYBERSECURITY MARKET UPDATE
• Key Cybersecurity Observations
• M&A Overview & Trends
• Public Comparable Companies Equity Performance
• Notable M&A Transaction & Funding Activity
• Evergreen Relevant Transactions & Clients
WHAT THIS REPORT CONTAINS
Cybersecurity Market Update | 3
KEY CYBERSECURITY OBSERVATIONS
INFORMATION SECURITY TRENDS
Sources: Gartner, Cybersecurity Ventures, Enterprise Strategy Group, International Data Corporation
WORLDWIDE SECURITY SPENDING
• Gartner forecasts global information security spending to reach $96.3 billion in 2018, up 8% from 2017
• Growth in spending is driven by increasing regulations, shifting buyer mindset, awareness of emerging threats, and the evolution to digital business
strategies
• A shortage of cybersecurity talent continues to hinder the effectiveness of security operations, with 45% of organizations reporting a problematic gap
in cybersecurity skills
• Cybersecurity employment forecasts have been unable to keep pace with the rapid rise in breaches, leading to an estimated 3.5 million global unfilled
cybersecurity job openings in 2021
• Companies continue to increase reliance on outsourced services to manage their security operations – IDC estimates that services will be the largest
area of security-related spending over the next 5 years
• Gartner predicts that total enterprise spending on security outsourcing services will account for 75% of all spending on security software and
hardware products by 2019
($ in billions)
$3.91
$4.28
$4.70
$15.16
$16.22
$17.47
$9.79
$10.93
$11.67
$48.80
$53.07
$57.72
$4.57
$4.64
$4.75
$82.23
$89.13
$96.30
2016
2017
2018
Identity Access Management Infrastructure Protection Network Security Equipment Security Services Consumer Security Software
Cybersecurity Market Update | 4
CYBERSECURITY M&A ACTIVITY
MOST ACTIVE ACQUIRERSANNOUNCED TRANSACTIONS
DEAL COUNT BY US REGION
($ in millions)
$960.6
$2,003.2
$629.0
$1,329.2
$376.5
$114.3
$1,256.6
$383.1 $269.2
$475.9
$1,103.3 $994.0
13
11
15
10
14
21
1514
19 19
21
17
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016 2017
Deal Volume Deal Count
Source: PitchBook data as of 12/29/17
Company Recent Relevant Acquisitions
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016 2017
Mid Atlantic Mountain South Southeast West Coast Great Lakes New England
Cybersecurity Market Update | 5
NOTABLE M&A TRANSACTIONS
April 2017
On April 3, 2017 CA closed on a agreement to
purchase application security vendor Veracode
for $614 million.
The acquisition will enable CA Technologies to
move more prominently into the secure DevOps
field. With the ability to scale and automate
application security testing, CA is expected to
develop and deploy applications faster with
fewer defects.
February 2017
On February 27, 2017 Palo Alto Networks
(NYSE:PANW) closed its acquisition of
LightCyber. Under the terms of the agreement
Palo Alto Networks acquired LightCyber for
$105 million in cash.
The acquisition of LightCyber will bring
behavioral analytics to the Palo Alto network and
enhance the automated threat prevention
capabilities throughout the entire network.
October 2017DigiCert and Symantec (NASDAQ:SYMC)
closed an agreement on October 31st, 2017
under which DigiCert will acquire Symantec’s
website security and related PKI solutions for
$950 million in upfront cash and a 30% stake in
DigiCert..
The acquisition will provide DigiCert with the
capabilities to take advantage of growth
opportunities in the IoT marketplace, and bring
new approaches to the SSL market.
November 2017Thoma Bravo, LLC entered into an agreement to
acquire Barracuda Networks, Inc. (NYSE:CUDA)
on November 26, 2017 with an implied
enterprise value of $1.4 billion. Under the terms
of the agreement, Thoma Bravo will pay $27.55
in cash for each share of Barracuda Networks'
common stock outstanding.
Thoma Bravo believes that the proposed
transaction presents an opportunity to
accelerate growth in their security platform.
On July 31, 2017 Symantec (NASDAQ:SYMC)
closed on an agreement to acquire Israel-based
Fireglass for a purchase price of $225 million.
Fireglass, is an agentless isolation solution that
eliminates ransomware, malware and phishing
threats in real-time. The acquisition will bolster
Symantec’s offering in secure web gateways
and email protection.
July 2017 June 2017Microsoft (NASDAQ:MSFT) announced on June
8, 2017 that it had agreed to purchase Hexadite
for $100 million.
Hexadite provides technology that automates
responses to cyber attacks which increases
productivity and reduces costs for clients. This
acquisition is part of Microsoft’s plan to invest of
$1 billion annually in cyber security R&D over
the coming years.
Source: S&P Capital IQ as of 12/29/17
Cybersecurity Market Update | 6
CYBERSECURITY INVESTMENT ACTIVITY
MOST ACTIVE INVESTORSPRIVATE EQUITY ACTIVITY
VENTURE CAPITAL ACTIVITY
($ in millions)
($ in millions)
$321.9
$39.9 $106.1
$814.6
$162.3
$21.2 $10.0
$995.6
$315.0
$1,204.0
$364.9
$179.5 4
87
9 9
7
5
11 11
18
9 9
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016 2017
Total Capital Invested PE Investments
$139.2
$258.8 $223.9
$559.7
$267.1
$344.7
$426.8
$125.3
$253.0
$523.4
$350.8 $325.1
39
55
39
48
5862
50 51
94
67 66
41
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016 2017
Total Capital Invested VC Investments
Investor Recent Relevant Investments
Source: PitchBook data as of 12/29/17
Cybersecurity Market Update | 7
NOTABLE FUNDING ACTIVITY
February 2017
HackerOne raised $40 million of Series C
venture funding in a deal led by Dragoneer
Investment Group on February 8, 2017, with a
pre-money valuation of $158.39 million.
The company will use the funds to invest further
in technology development, expand market
reach and continue to strengthen the world's
largest and most diverse hacker community.
January 2017SentinelOne raised $70 million of Series C
venture funding in a round led by Redpoint
Ventures on January 25, 2017, with a pre-
money valuation of $140 million.
The company plans to use this new infusion of
capital to aggressively expand its sales and
marketing efforts to drive more than 400% global
sales growth in 2017, while maintaining a strong
investment in its R&D initiatives towards its next-
generation endpoint protection platform.
August 2017
Druva raised $80 million of venture funding led
by Riverwood Capital on August 22, 2017. The
company has raised a total of $200 million in
funding to date.
The company will use the funding for research
and development, as well as to expand its
international sales force while marketing for
global adoption.
September 2017Threat Stack raised $45 million of Series C
venture funding through a combination of debt
and equity in a deal led by F-Prime Capital
Partners and Eight Roads Ventures on
September 19, 2017, with a pre-money valuation
of $135 million.
The company has raised more than $70 million
to date, and intends to use the funds to grow
their employee base and expand their presence
in North America and internationally.
Netskope raised $100 million of Series E funding
from lead investor Lightspeed Venture Partners
and Accel on April 27, 2017, with a pre-money
valuation of $425 million.
The funding will fuel the advancement and go-
to-market of the company's enterprise cloud
security platform and help the company build out
its team and to expand the customer base for its
cloud security platform for businesses.
April 2017 April 2017
Illumio raised $125 million of Series D venture
funding from lead investor J.P. Morgan Asset
Management on April 20, 2017, with an
estimated pre-money valuation of $1.05 billion.
The company plans to increase product
development, international expansion in Europe
and Asia, and to expand business development,
R&D, and customer support.
Source: PitchBook data as of 12/29/17
Cybersecurity Market Update | 8
PUBLIC COMPANY EQUITY PERFORMANCE
Source: S&P Capital IQ as of 12/29/17
Note: EAC Cybersecurity comprised of public companies listed in following sections
30.4%
18.9%
36.7%
(5.0%)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17
EAC Cybersecurity Index +30.4% S&P 500 +18.9% Dow Jones U.S. Software Index +36.7%
Cybersecurity Market Update | 9
PUBLIC COMPANIES SUMMARY
($ in millions, except per share) Share % of 52-Wk Market Enterprise EBITDA 2-Year Estimated CAGR TEV / Revenue TEV / EBITDA
Company Ticker Price High Cap Value (TEV) Margin Revenue EBITDA EPS LTM 2018E 2019E LTM 2018E 2019E
Symantec Corporation SYMC 28.06$ 82.0% 17,396.7$ 21,579.7$ 13.0% 11.6% 20.6% 27.1% 4.7x 4.4x 4.2x 36.2x 9.6x 8.4x
Check Point Software Technologies Ltd. CHKP 103.62 86.9% 16,936.0 15,425.9 49.7% 6.5% 7.1% 10.1% 8.4x 8.3x 7.8x 16.9x 14.8x 14.0x
Palo Alto Networks, Inc. PANW 144.94 91.9% 13,318.4 12,346.2 NM 21.1% 30.8% 23.4% 6.6x 6.3x 5.2x NM 26.2x 20.1x
Splunk Inc. SPLK 82.84 97.6% 11,718.4 10,737.9 NM 28.0% 51.0% 44.0% 9.3x 8.6x 6.9x NM 73.8x 51.5x
Trend Micro Incorporated 4704 56.71 97.0% 7,796.4 6,540.2 35.8% 9.7% 14.7% 8.5% 5.0x 5.0x 4.6x 14.0x 14.9x 13.4x
Fortinet, Inc. FTNT 43.69 95.7% 7,597.7 6,321.9 11.8% 15.3% 24.1% 27.6% 4.4x 4.3x 3.7x 37.3x 20.5x 17.0x
Proofpoint, Inc. PFPT 88.81 90.7% 3,981.8 3,903.4 NM 32.9% 53.1% 66.8% 8.2x 7.7x 5.9x NM 59.7x 43.1x
Sophos Group plc SOPH 7.69 87.2% 3,587.2 3,810.3 1.2% 18.9% 21.0% 5.4% 6.7x 6.7x 5.5x NM 79.0x 59.1x
FireEye, Inc. FEYE 14.20 78.9% 2,621.1 2,512.4 NM 5.8% - - 3.4x 3.4x 3.1x NM 28.7x 24.7x
Okta, Inc. OKTA 25.61 76.1% 2,610.3 2,386.7 NM 0.0% - - 10.3x 9.4x 7.1x NM NM NM
Qualys, Inc. QLYS 59.35 95.2% 2,250.5 1,947.8 25.8% 16.3% 19.5% 16.6% 8.8x 8.5x 7.3x 34.3x 23.0x 20.1x
Mimecast Limited MIME 28.67 89.6% 1,643.3 1,554.8 3.5% 28.7% 75.7% 45.1% 7.0x 6.5x 5.3x NM 72.6x 51.0x
CyberArk Software Ltd. CYBR 41.39 74.4% 1,438.0 1,163.7 12.0% 18.9% 8.7% 2.2% 4.7x 4.5x 3.8x 39.6x 20.6x 16.4x
Imperva, Inc. IMPV 39.70 75.8% 1,350.4 1,007.1 NM 19.5% 191.4% - 3.3x 3.1x 2.7x NM 23.2x 18.1x
Rapid7, Inc. RPD 18.66 92.1% 818.8 734.9 NM 22.1% - - 3.9x 3.7x 3.1x NM NM NM
F-Secure Oyj FSC1V 4.67 80.4% 731.7 634.3 10.7% 9.0% 7.3% 4.3% 3.2x 3.1x 2.8x 30.0x 28.6x 18.7x
SecureWorks Corp. SCWX 8.87 68.3% 719.2 619.5 NM 8.2% - - 1.3x 1.3x 1.2x NM NM NM
VASCO Data Security International, Inc. VDSI 13.90 88.1% 554.4 395.7 5.6% 3.5% 0.0% NM 2.1x 2.1x 1.9x 38.0x 20.7x 18.5x
MobileIron, Inc. MOBL 3.90 57.6% 374.6 292.4 NM 6.7% - - 1.7x 1.7x 1.6x NM NM NM
Zix Corporation ZIXI 4.38 65.7% 241.1 208.3 22.5% 8.7% 13.7% 13.2% 3.2x 3.2x 2.9x 14.4x 11.4x 9.5x
Absolute Software Corporation TSX:ABT 5.46 78.0% 215.5 183.0 12.9% 6.3% 26.2% - 2.0x 2.0x 1.9x 15.4x 23.8x 17.4x
Mean 4,662.0$ 4,490.8$ 2.2% 14.9% 35.3% 22.6% 5.2x 4.9x 4.2x 27.6x 32.4x 24.8x
Median 2,250.5$ 1,947.8$ 3.5% 13.5% 20.8% 16.6% 4.7x 4.4x 3.8x 32.2x 23.2x 18.5x
Source: S&P Capital IQ as of 12/29/17
Cybersecurity Market Update | 10
PUBLIC COMPANIES – RELATIVE RANKING
Source: S&P Capital IQ as of 12/29/17
SYMC Symantec Corporation SOPH Sophos Group plc RPD Rapid7, Inc.
CHKP Check Point Software Technologies Ltd. FEYE FireEye, Inc. FSC1V F-Secure Oyj
PANW Palo Alto Networks, Inc. OKTA Okta, Inc. SCWX SecureWorks Corp.
SPLK Splunk Inc. QLYS Qualys, Inc. VDSI VASCO Data Security International, Inc.
4704 Trend Micro Incorporated MIME Mimecast Limited MOBL MobileIron, Inc.
FTNT Fortinet, Inc. CYBR CyberArk Software Ltd. ZIXI Zix Corporation
PFPT Proofpoint, Inc. IMPV Imperva, Inc. TSX:ABT Absolute Software Corporation
LTM Gross Margin TEV / 2017E Revenue TEV / 2018E Revenue TEV / 2017E EBITDA TEV / 2018E EBITDA10 44 46 52 54
FSC1V 96.0% OKTA 9.4x CHKP 7.8x SOPH 79.1x SOPH 59.2x
CHKP 88.5% SPLK 8.6x QLYS 7.3x SPLK 73.8x SPLK 51.5x
TSX:ABT 84.5% QLYS 8.5x OKTA 7.1x MIME 72.6x MIME 51.0x
CYBR 84.1% CHKP 8.3x SPLK 6.9x PFPT 59.7x PFPT 43.1x
MOBL 82.5% PFPT 7.7x PFPT 5.9x MEAN 32.4x MEAN 24.8x
4704 81.8% SOPH 6.7x SOPH 5.5x FEYE 28.7x FEYE 24.7x
ZIXI 81.3% MIME 6.5x MIME 5.3x FSC1V 28.6x PANW 20.1x
IMPV 80.0% PANW 6.3x PANW 5.2x PANW 26.2x QLYS 20.1x
SPLK 79.2% 4704 5.0x 4704 4.6x TSX:ABT 23.9x FSC1V 18.7x
SYMC 78.4% MEAN 4.9x MEAN 4.2x IMPV 23.2x VDSI 18.5x
QLYS 78.0% CYBR 4.5x SYMC 4.2x QLYS 23.0x IMPV 18.1x
SOPH 77.5% SYMC 4.4x CYBR 3.8x VDSI 20.7x TSX:ABT 17.4x
MEAN 76.7% FTNT 4.3x FTNT 3.7x CYBR 20.6x FTNT 17.0x
FTNT 74.3% RPD 3.7x FEYE 3.1x FTNT 20.5x CYBR 16.4x
MIME 73.7% FEYE 3.4x RPD 3.1x 4704 14.9x CHKP 14.0x
RPD 72.7% ZIXI 3.2x ZIXI 2.9x CHKP 14.8x 4704 13.4x
PANW 72.3% IMPV 3.1x FSC1V 2.8x ZIXI 11.4x ZIXI 9.5x
PFPT 72.2% FSC1V 3.1x IMPV 2.7x SYMC 9.6x SYMC 8.4x
VDSI 70.0% VDSI 2.1x VDSI 1.9x
OKTA 68.0% TSX:ABT 2.0x TSX:ABT 1.9x
FEYE 64.1% MOBL 1.7x MOBL 1.6x
SCWX 52.3% SCWX 1.3x SCWX 1.2x
2-Year Revenue CAGR 3-Year EPS CAGR16
PFPT 32.9%
MIME 28.7%
SPLK 28.0%
RPD 22.1%
PANW 21.1%
IMPV 19.5%
CYBR 18.9%
SOPH 18.9%
QLYS 16.3%
FTNT 15.3%
MEAN 14.9%
SYMC 11.6%
4704 9.7%
FSC1V 9.0%
ZIXI 8.7%
SCWX 8.2%
MOBL 6.7%
CHKP 6.5%
TSX:ABT 6.3%
FEYE 5.8%
VDSI 3.5%
Cybersecurity Market Update | 11
M&A TRANSACTIONS
($ in millions) Enterprise Implied EV /
Announced Target Acquirer Target Description Value (EV) Revenue EBITDA
22-Dec-17 MTS Technologies, Inc. Innové LLCMTS Technologies, Inc. provides technical and management solutions to defense, civilian,
and commercial markets in the United States.NA NA NA
19-Dec-17 Waytek Softw are Netw ork Security Group, Inc.Waytek Softw are includes softw are distribution and value-added resale business and is
located in the United States.NA NA NA
13-Dec-17 Fox Technologies, Inc. HelpSystems, LLCFox Technologies, Inc. provides netw ork security and access management softw are
solutions for organizations to centralize Linux and Unix access management.NA NA NA
27-Nov-17 Barracuda Netw orks, Inc.Thoma Bravo, LLC; Thoma Bravo Fund XII,
L.P.Barracuda Netw orks, Inc. designs and delivers security and data protection solutions. 1,405.3 3.83x 43.08x
20-Nov-17 CYREN Ltd. Warburg Pincus LLCCYREN Ltd. provides information security solutions for protecting Web, email, and mobile
transactions in the United States, Germany, Europe, Asia, Israel, and internationally.72.9 2.32x NA
14-Nov-17 Datashield, LLC (nka:ADT Cybersecurity) The ADT Corporation ADT Cybersecurity provides cyber security services for mid-sized companies. NA NA NA
13-Nov-17 Secure-24, Inc. NTT Communications CorporationSecure-24, Inc. provides managed IT operations, application hosting, and managed cloud
services to enterprises in the United States and internationally.NA NA NA
13-Nov-17 Conexsys Communications Ltd. Optiv Security Inc.Conexsys Communications, Ltd. engages in the development, deployment, and support of
enterprise security and netw ork infrastructure solutions.NA NA NA
2-Nov-17 TheBplan AS Transtema Group AB TheBplan AS offers data security, backup, and recovery services. 2.8 NA NA
30-Oct-17 LAW Trusted Third Party Services (Pty) Ltd Ansys LimitedLAW Trusted Third Party Services (Pty) Ltd designs and develops online security and data
transfer applications.8.8 NA NA
25-Oct-17 HansolNexG Co., Ltd U&I Global Co., Ltd. HansolNexG Co., Ltd provides netw ork security solutions primarily in South Korea. NA NA NA
23-Oct-17 Securable.io Know Be4, Inc. Securable.io develops cyber security and aw areness training softw are. NA NA NA
20-Oct-17 Morphick Inc Booz Allen Hamilton Holding CorporationMorphick Inc. provides a technology-enabled managed service that tailors cyber security
solutions to their clients and enables them to morph their defenses.NA NA NA
19-Oct-17 TopSpin Security, Ltd.General Dynamics Fidelis Cybersecurity
Solutions Inc.TopSpin Security, Ltd. provides a malw are detection technology. NA NA NA
18-Oct-17 Agiliance, Inc. Resolver Inc.Agiliance, Inc., a big data risk company, provides integrated solutions for operational and
security risk intelligence for businesses.NA NA NA
17-Oct-17 SignalSense, Inc. Splunk Inc.As of October 17, 2017, SignalSense, Inc. w as acquired by Splunk Inc. SignalSense, Inc.
develops and provides cyber and enterprise security solutions.NA NA NA
16-Oct-17 LNS Technologies, Inc. CompuCom Systems, Inc.LNS Technologies, Inc. engages in providing information technology support, cloud
solutions, and information security solutions to small businesses.1.8 NA NA
11-Oct-17 Nominum, Inc. Akamai Technologies, Inc.Nominum, Inc. provides domain name system (DNS) softw are solutions for service
providers w orldw ide.NA NA NA
11-Oct-17DXC Technology, U.S. Public Sector
Business
KeyPoint Government Solutions, Inc.;
Vencore Holding Corp.
DXC Technology, U.S. Public Sector Business provides technology services, w hich
includes cybersecurity, cloud computing, data, and applications.NA NA NA
Source: S&P Capital IQ as of 12/29/17
Cybersecurity Market Update | 12
M&A TRANSACTIONS (CONT.)
($ in millions) Enterprise Implied EV /
Announced Target Acquirer Target Description Value (EV) Revenue EBITDA
6-Oct-17 Cyence Inc. Guidew ire Softw are, Inc.Cyence Inc. provides a platform for the economic modeling of cyber risk for the insurance
industry globally.266.0$ NA NA
5-Oct-17 SmoothWall Ltd. Tenzing Private Equity SmoothWall Ltd. develops Web filtering and Internet security solutions. NA NA NA
3-Oct-17 ZyEdge LLC Fuse Engineering, LLC ZyEdge LLC provides managed netw ork services. NA NA NA
29-Sep-17 Deltagon Group Oy UTIB INVL TechnologyDeltagon Group Oy, a cyber security company, develops information security solutions for
electronic communications and electronic services for a range of industries.7.4 2.39x NA
28-Sep-17 Root9B LLC Tracker Capital Management, LLCRoot9B LLC provides cyber security and advanced technology training, operational
support, and consulting services to federal government and commercial customers.NA NA NA
25-Sep-17Surveillance and Cyber Security Solutions,
LLCMission Solutions Group, LLC
Surveillance and Cyber Security Solutions, LLC develops information security engineering
strategies and technical solutions for clients to protect and defend against data loss.NA NA NA
31-Aug-17 Cyphort Inc. Juniper Netw orks, Inc.Cyphort Inc. develops softw are and appliance based solutions to protect enterprises and
governments against cybercrime attacks w ith payloads.NA NA NA
28-Aug-17 RedOw l Analytics, Inc. Forcepoint LLCRedOw l Analytics, Inc. operates a cyber security platform that offers information security
and regulatory surveillance.54.0 NA NA
28-Aug-17 Meontrust Inc. Inside Secure S.A.Meontrust Inc. provides security solutions to banks, f inancial services, telecom operators,
and other online services and their users.6.0 NA NA
21-Aug-17 Castle Access, Inc. Zayo Group Holdings, Inc. Castle Access, Inc. operates enterprise grade data centers. 11.9 NA NA
16-Aug-17 CipherPoint Softw are, Inc. Covata LimitedCipherPoint Softw are, Inc. provides data centric auditing and protection solutions for
securing unstructured information in various platforms.3.0 NA NA
15-Aug-17 ikb Data GmbH DATAGROUP SE ikb Data GmbH provides IT infrastructure and data security services. NA NA NA
2-Aug-17Symantec Corporation, Website Security and
Related PKI Solutions BusinessDigiCert, Inc.
Symantec Corporation, Website Security and Related PKI Solutions Business comprises
Secure Sockets Layer (SSL), Transport Layer Security (TLS), and IoT solutions.NA NA NA
1-Aug-17 Aviram Netw orks, Inc. Qualys, Inc.Aviram Netw orks, Inc. develops secure sw itching and identity-based policy enforcement
appliances.NA NA NA
30-Jul-17 CanBusHack, Inc. Trillium IncorporatedCanBusHack, Inc. offers automotive cyber security consulting services and penetration
testing.NA NA NA
28-Jul-17 Information Risk Management Limited Altran Technologies S.A. Information Risk Management Limited provides information security consultancy services. NA NA NA
26-Jul-17 Guidance Softw are, Inc. Open Text CorporationGuidance Softw are, Inc., a technology company, provides forensic security solutions in the
United States, Europe, Asia, and internationally.245.2 2.26x NA
21-Jul-17Beijing ACT Technology Development CO.,
LTD.Surfilter Netw ork Technology Co., Ltd.
Beijing ACT Technology Development CO., LTD. designs and develops netw ork security
products.62.5 2.55x NA
18-Jul-17 Komand Rapid7, Inc. Komand develops a security orchestration and automation system platform. NA NA NA
Source: S&P Capital IQ as of 12/29/17
Cybersecurity Market Update | 13
M&A TRANSACTIONS (CONT.)
($ in millions) Enterprise Implied EV /
Announced Target Acquirer Target Description Value (EV) Revenue EBITDA
17-Jul-17 Brighterion, Inc. Mastercard IncorporatedBrighterion, Inc. develops softw are solutions for real-time fraud prevention, predictive
intelligence, risk management, AML/KYC compliance, and homeland security intelligence.NA NA NA
13-Jul-17 Observable Netw orks, Inc. Cisco Systems, Inc.Observable Netw orks, Inc. provides netw ork security technology and threat detection
services that identify compromised and misused netw orked devices.NA NA NA
11-Jul-17 Skycure Ltd. Symantec Corporation Skycure Ltd. develops enterprise mobile threat defense solutions. NA NA NA
7-Jul-17 Accel Systems & Technologies Pte. Ltd. StarHub Ltd.Accel Systems & Technologies Pte. Ltd. manufactures computers and peripheral
equipment.36.4 2.57x NA
6-Jul-17 Fireglass Symantec Corporation Fireglass develops and offers cyber security solutions. 225.0 NA NA
5-Jul-17 Enforcive, Inc. Vision Solutions Inc.Enforcive, Inc. develops and markets data security softw are and netw ork security audit
solutions for IBM i, AS/400, iSeries, and mainframe computers.NA NA NA
3-Jul-17 NCI, Inc.H.I.G. Capital, LLC; HIG Middle Market LBO
Fund II
NCI, Inc. provides information technology (IT) and professional services and solutions to
defense, intelligence, healthcare, and civilian government agencies w orldw ide.285.1 0.88x 9.61x
3-Jul-17 Cyber Sciences, Inc. Patoka Capital LLCCyber Sciences, Inc. manufactures specialty products for monitoring and control of
electrical distribution systems.NA NA NA
29-Jun-17 Info@Risk, Inc. Burr, Pilger and Mayer LLPInfo@Risk, Inc. provides information security assessment and risk assessment services
for clients.NA NA NA
27-Jun-17 Securethoughts.com XLMedia PLC Securethoughts.com provides online cyber security comparison services. 2.0 NA NA
20-Jun-17 Mainstream Security, LLC RoundTow er Technologies, Inc. Mainstream Security, LLC provides information security services. NA NA NA
16-Jun-17 ID Watchdog, Inc. Equifax Consumer Services, Inc.ID Watchdog, Inc., through its subsidiary, Identity Rehab Corporation, provides identity theft
detection, protection, and resolution services primarily to individuals and families.63.0 5.60x 79.19x
13-Jun-17 DHANY, LLC Prevalent Netw orks LLCDHANY, LLC, doing business as Datum Security, provides cyber risk management solution
to small and medium-sized vendors.NA NA NA
12-Jun-17 NextNine Ltd. Honeyw ell International Inc. NextNine Ltd. develops operational technology security management softw are. NA NA NA
8-Jun-17 Hexadite Ltd. Microsoft CorporationHexadite Ltd. develops a security orchestration and automation solution to investigate and
resolve cyber incidents.100.0* NA NA
7-Jun-17 Watchful Softw are Symantec Corporation Watchful Softw are provides data-centric information security solutions. NA NA NA
30-May-17 Expert Solution Support Center BV Nixu OyjExpert Solution Support Center BV offers digital identity management support solutions and
product support services w orldw ide.2.3 0.66x NA
30-May-17 Continuum Managed Services, LLCThoma Bravo, LLC; Thoma Bravo
Discover Fund PartnershipContinuum Managed Services, LLC provides integrated managed service solutions. NA NA NA
24-May-17 Resolve Systems, LLC Insight Venture Partners LLCResolve Systems, LLC develops and provides incident resolution solutions for information
technology and netw ork operations, along w ith customer care centers.NA NA NA
* Undisclosed estimate
Source: S&P Capital IQ as of 12/29/17
Cybersecurity Market Update | 14
M&A TRANSACTIONS (CONT.)
($ in millions) Enterprise Implied EV /
Announced Target Acquirer Target Description Value (EV) Revenue EBITDA
22-May-17 CYPHRE Security Solutions, LLC RigNet, Inc. CYPHRE SECURITY SOLUTIONS, LLC operates in the technology industry. NA NA NA
16-May-17 Landscape Netw orks Ltd Communicate Technology PLCLandscape Netw orks Ltd provides information security, secure LAN/WAN infrastructure,
and data protection products and services.NA NA NA
11-May-17 Conjur, Inc. CyberArk Softw are Ltd.Conjur, Inc. offers directory services and cloud native authorization platform for developers
and security teams to monitor, adopt, manage, secure, and audit enviornments.42.0 NA NA
11-May-17 Digital Assurance Consulting Ltd F-Secure OyjDigital Assurance Consulting Ltd provides information security consultancy assessment
services.NA NA NA
9-May-17Probaris Technologies, Inc., Certain
Softw are Assets
WidePoint Cybersecurity Solutions
Corporation
As of May 9, 2017, certain softw are assets of Probaris Technologies, Inc. w as acquired
by WidePoint Cybersecurity Solutions Corporation.0.4 NA NA
4-May-17 Davinsi Labs BVBA Proximus PLC Davinsi Labs BVBA provides enterprise security solutions and services in Belgium. NA NA NA
3-May-17 Morgan 6, LLC Mission Solutions Group, LLCMorgan 6, LLC develops agile solutions, government IT services, cyber security, and
softw are development services.NA NA NA
28-Apr-17 Open Systems AGEQT Partners AB; EQT Mid Market Europe
Fund
Open Systems AG provides netw ork security, application delivery, identity management,
global connectivity, and integrated service management services for customers.NA NA NA
3-Apr-17 Foursys Ltd. Chess Limited Foursys Ltd. provides IT security services to business clients in the United Kingdom. NA NA NA
30-Mar-17 SDGblue, LLC Crow e Horw ath LLPSDGblue, LLC, an information technology professional services company, provides
information security, managed services, and netw ork infrastructure solutions.NA NA NA
29-Mar-17 Evolved Cyber Solutions, LLC Edw ards Industries, LLC Evolved Cyber Solutions, LLC provides cyber security services. NA NA NA
29-Mar-17 NuData Security Inc. Mastercard Incorporated NuData Security Inc. develops and markets biometrics and behavioral analytics solutions. NA NA NA
22-Mar-17 Sucuri Inc. GoDaddy Inc. Sucuri Inc. provides malw are monitoring and cleanup solutions. NA NA NA
20-Mar-17 Communication Cable Company Optiv Security Inc. Communication Cable Company provides technology and security solutions. NA NA NA
20-Mar-17 Aporia Solutions, Inc. Accume Partners, LLCAporia Solutions, Inc. provides IT risk and security assessment, audits, and security audits
services in Texas, Arkansas, Louisiana, Oklahoma, and Mississippi.NA NA NA
16-Mar-17 Magnus Management Group, LLC NXTKey CorporationMagnus Management Group, LLC provides consulting services in the areas of information
security management, project management, and operation management.NA NA NA
8-Mar-17 Sotera Defense Solutions, Inc. The KEYW CorporationSotera Defense Solutions, Inc., a security technology company, provides technology-based
systems, solutions, and services for national security agencies and programs.350.3 1.33x 15.64x
7-Mar-17 Avaya Inc., Netw orking Business Extreme Netw orks, Inc.Netw orking Business comprises end-to-end fabric-based secure netw orking solutions and
netw ork security solutions.100.0 NA NA
7-Mar-17 SafeGuard PII Corp. Adama Technologies CorporationSafeGuard PII Corp. offers identity theft protection services for businesses and families in
the United States and Canada.NA NA NA
Source: S&P Capital IQ as of 12/29/17
Cybersecurity Market Update | 15
M&A TRANSACTIONS (CONT.)
Source: S&P Capital IQ as of 12/29/17
($ in millions) Enterprise Implied EV /
Announced Target Acquirer Target Description Value (EV) Revenue EBITDA
6-Mar-17 Veracode, Inc. CA, Inc. Veracode, Inc. provides a cloud-based application security platform. 614.0$ NA NA
28-Feb-17 LightCyber Ltd. Palo Alto Netw orks, Inc.LightCyber Ltd. develops solutions for identifying and preventing cyber-attacks and
advanced persistent threats (APT).105.0 10.50x NA
20-Feb-17 OR3M LLCSetracon Inc. (nka:SETRACON Enterprise
Security Risk Management Services)
OR3M LLC operates as a standards-based security information management platform and
services company.NA NA NA
16-Feb-17 Inverse Path S.r.l. F-Secure Oyj As of February 16, 2017, Inverse Path S.r.l. w as acquired by F-Secure Oyj. NA NA NA
13-Feb-17 Deep Run Security Services, LLC Convergence Technology Consulting, LLCDeep Run Security Services, LLC provides cyber security services for retail, healthcare,
f inance, hospitality, and higher education markets.NA NA NA
13-Feb-17 Eclipsecurity, LLC HALOCK Security Labs Eclipsecurity, LLC provides information security consulting services globally. NA NA NA
9-Feb-17VeriSign, Inc., iDefense Security Intelligence
Services BusinessAccenture plc
As of April 3, 2017, iDefense Security Intelligence Services Business of VeriSign, Inc. w as
acquired by Accenture plc.NA NA NA
8-Feb-17Endgame, Inc., U.S. Federal Government
Services BusinessAccenture plc
Endgame, Inc., U.S. Federal Government Services Business comprises cyber defense,
hunt-as-a-service capabilities, red teaming, and cyber operations.NA NA NA
8-Feb-17 Invincea, Inc. Sophos Group plc Invincea, Inc. develops endpoint security softw are solutions. 120.0 12.24x NA
1-Feb-17 Ow l Computing Technologies, Inc. Acuity Technologies Holding CompanyOw l Computing Technologies, Inc. designs, develops, manufactures, and implements cyber
security defense equipment for critical netw orks.NA NA NA
31-Jan-17 Seculert Ltd. Radw are Ltd.Seculert Ltd. provides cloud-based cyber threat management services to detect and
prevent cyber threats from infiltrating in to netw orks.NA NA NA
30-Jan-17 ThreatWave Return Path, Inc.ThreatWave develops email data netw ork sensor and data processing platform to provide
email based data intelligence.NA NA NA
25-Jan-17 InfoSERVER S.A. Wipro LimitedInfoSERVER S.A. provides information security and identity protection technology solutions
for f inancial and banking, industry, service and retail, and other sectors in Brazil.8.8 NA NA
17-Jan-17 Bat Blue Corporation OPAQ Netw orks, Inc.Bat Blue Corporation provides Internet protocol (IP) and cloud-based netw ork and security
solutions.NA NA NA
17-Jan-17 CynergisTek, Inc. (nka:CTEK Security, Inc.) Auxilio, Inc. (nka:Cynergistek, Inc.) CTEK Security, Inc. provides information technology (IT) security consulting services. 31.7 2.12x 6.35x
9-Jan-17 BluVector, Inc. LLR Partners Inc.BluVector, Inc. operates a cyber-threat detection and hunting platform that defends
enterprises against evolving security threats.NA NA NA
4-Jan-17 Watchcom Security Group AS Combitech ABWatchcom Security Group AS is an information security company that offers consulting
and solutions for securing netw ork and w eb solutions.NA NA NA
3-Jan-17 Enlighten IT Consulting Inc. Macaulay-Brow n, Inc.Enlighten IT Consulting Inc. provides mission critical IT services to the Department of
Defense (DoD), the intelligence community, and other organizations.NA NA NA
3-Jan-17 Continuum Worldw ide Corporation Sirius Computer Solutions, Inc.Continuum Worldw ide Corporation, doing business as Continuum Security Solutions,
provides information security consulting services.NA NA NA
Cybersecurity Market Update | 16
• The Evergreen team has completed over 100 M&A and capital
raising transactions, totaling over $5 billion in value for publicly
traded and privately held companies
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valuations for litigation and non-litigation matters for companies
across various industries with sizes ranging from early stage to
multi-million dollar publicly traded companies
• The Evergreen team has advised hundreds of companies on a
multitude of sophisticated and complex legal, accounting, valuation,
financial, and transaction related issues
• The Evergreen team possesses strong relationships with thousands
of strategic and financial investors
• Securities transactions conducted through Evergreen Advisors
Capital, LLC, member FINRA/SIPC
Evergreen Advisors is a boutique investment banking and corporate finance firm focused on servicing organizations throughout their financial lifecycle to
drive successful outcomes. We assist middle market and emerging companies by providing innovative and strategic solutions in the areas of:
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Cybersecurity Market Update | 17
REPRESENTATIVE CYBERSECURITY TRANSACTIONS & CLIENTS
Certain transactions may have been completed prior to Evergreen Advisors business relationship.
EVERGREEN TEAM
Joseph E. Statter
President & Managing Director
703.852.0020
Paul S. Klick, IV
Managing Director
703.852.1051
Eric M. Parekh
Director
703.659.1745
Michael A. Slarve
Analyst
703.852.0042
Thien V. Tran
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703.659.1945
Jake R. Buzy
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703.852.1060
Rick A. Kohr
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410.997.6000
Joseph T. Bradley
Managing Director
410.997.6000
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Analyst
410.997.6000