Introduction to Centaur Partners IT Security Market Update

Introduction to Centaur Partners IT Security Market Update

Centaur Partners-Research
IT Security Market Update
Centaur Partners
Mergers & Acquisitions, Private Placement Advisory, and Transaction Consulting
CONFIDENTIAL – NOT FOR DISTRIBUTION
© 2016, Centaur Partners │Confidential │
Technology Market Overview
120
110
100
90
12%
80
70
60
IT Security
Sep
Oct
Nov
SaaS (Vertical)
Dec
Jan
IT Infrastructure
Feb
Mar
BigData
Apr
NASDAQ Composite
May
Jun
SaaS (Vertical)
NASDAQ
SaaS
(Horizontal)
IT Infrastructure
IT Security
5%
6%
3%
14%
23%
Source: CapIQ 9/14/16
IT Security Index: AVG, SYMC, CHKP, FTNT, PANW, FIRE, IMPV, VDSI, PFPT, FEYE, QLYS
SaaS Horizontal Index: CRM, N, ULTI, JCOM, TRAK, APPF, BCOV, DWRE, LOGM, CTCT, CSOD, LPSN, MKTG, VOCS, IL, TNGO, SPSC, SQI, ZIXI, NOW, WDAY, LOCK, FLTX, QLYS, MKTO, MRIN, NEWR,
CARB, TNET, CALD, BOX, PCTY, BV, ZEN, RNG, CVT, FIVN, ECOM, AMBR, SAAS, UP, XTLY
SaaS Vertical Index: ATHN, MODN, VEEV, GWRE, RP, FLTX, ELLI, MDSO
Big Data Index: EMC, TDC, INFA, MSTR, SPLK, DWCH, ATTUF, NTAP, DATA, FIO, FALC
IT Infrastructure Index: VMW, CTXS, NTAP, CA, RHT, SWI, OTEX, CVLT, CPWR, QLIK, PEGA, MVSN, PRGS, JIVE, NTCT, BLOX, GUID, MGIC, FALC, FIO, GIMO, SSNI, CYNI
SaaS (Hor.)
Jul
Aug
Sep
Big Data
29%
© 2016 Centaur Partners │Confidential │
2
50
IT Security Index Component Returns (9/30/14 – 9/22/16)
VRNS
132%
PFPT
127%
CYBR
114%
ATEN
106%
IMPV
87%
PANW
82%
FTNT
51%
AVG
48%
QLYS
44%
CUDA
7%
TrendMicro
5%
VDSI
1%
CHKP
1%
SYMC
-1%
MOBL
FEYE
-60%
-37%
-44%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Stock Return
Note: Rapid7, Sophos, Alarm.com, and Mimecast
were not public as of 9/30/14, but are
components of the IT Security Index
© 2016, Centaur Partners │Confidential │
3
Valuation Matrix: Revenue Growth vs. EBITDA Margin
15% - 25%
<5%
5% - 15%
15% - 25%
Median EV/Rev: 3x
Median EV/EBITDA: 8.6x
Median EV/Rev: 3.3x
Median EV/EBITDA: 9x
Median EV/Rev: 4.9x
Median EV/EBITDA: 16.3x
6 companies
CA , CTXS , MSTR, PRGS ,
TDC, VMW
8 companies
AKAM, AVG, CHKP , FFIV,
JCOM, LOGM, SYMC , ZIXI
8 companies
ANET, CYBR, ELLI, FLTX, GIMO,
OTEX , QLYS, RHT
Median EV/Rev: 2.8x
Median EV/EBITDA: 14.3x
Median EV/Rev: 4.7x
Median EV/EBITDA: 20.5x
8 companies
ALRM, CUDA, GDDY, GWRE,
IL, PEGA , RP, UPLD
6 companies
ATHN, FTNT, MDSO, CRM,
ULTI, VDSI
Median EV/Rev: 1.6x
Median EV/EBITDA: 9.4x
3 company
CARB, BLOX, NTAP
Median EV/Rev: 1.2x
Median EV/EBITDA: 13.3x
<15%
EBITDA Margin (2016E)
>25%
Projected Revenue Growth (2016 – 2017E)
Medians
5 companies
BV, JIVE, MRIN, TNGO,
VMEM
2.1 EV/Rev
8.9 EV/EBITDA
Median EV/Rev: 1.8x
Median EV/EBITDA: 25.2x
Median EV/Rev: 3.5x
Median EV/EBITDA: 30.4x
>25%
Median EV/Rev: 5.9x
Median EV/EBITDA: 19.9x
2 companies
NTCT , VEEV
Median EV/Rev: 7x
Median EV/EBITDA: 31.2x
2 companies
PANW, NOW
3.7 EV/Rev
11 EV/EBITDA
3.2 EV/Rev
17.4 EV/EBITDA
Median EV/Rev: 4.6x
Median EV/EBITDA: 54.8x
13 companies
13 companies
15 companies
ATEN, HIVE, AMBR, BCOV,
ECOM, CVLT , DWCH, GUID , CALD, CSOD, CVT, FEYE, FIVN, APIC, APPF, BOX, CSLT, HDP,
LOCK, MOBL, SSNI, SOPH, IMPV, SAAS, NMBL, RNG, SPSC, N, NEWR, PCTY, PFPT, PSTG,
DATA, VRNS, WK
RPD, SPLK, WDAY, XTLY, ZEN
TNET
3 EV/Rev
14.2 EV/EBITDA
Medians
4 EV/Rev
21.9 EV/EBITDA
3.1 EV/Rev
30.1 EV/EBITDA
6.3 EV/Rev
32.1 EV/EBITDA
Revenue growth commands a premium over profitability
Source: CapIQ as of 9/21/16
Projected Revenue Growth and EBITDA Margin based on consensus
estimates from CapIQ.
Companies with TEV / EBITDA multiples that fall outside the range of
0x – 55x are excluded from the above valuation matrix
© 2016, Centaur Partners │Confidential │
4
Technology Sector Forward Revenue Valuation Analysis
7.0x
6.0x
6.4x
5.0x
4.0x
4.8x
4.2x
3.0x
4.8x
4.2x
3.5x
2.8x
2.0x
3.5x
2.5x
2.9x
1.0x
0.0x
SaaS
Mobile Payments
IT Security
Mean EV/2016 Revenue
Big Data
IT Infrastructure
Mean EV/2015 Revenue
50%
40%
30%
20%
29%
21%
23%
18%
10%
0%
8%
SaaS
22%
22%
26%
16%
9%
Mobile Payments
IT Security
Mean 2016 Revenue Growth
Big Data
IT Infrastructure
Mean 2015 Revenue Growth
Forward revenue valuation levels are lower today than a year ago
Source: Capital IQ 9/22/16
© 2016, Centaur Partners │Confidential │
5
IT Security Market Valuation – 2016
Mean 4.5x
TEV / Revenue
Median 4.2x
Mean EV / 2016 Revenue Multiple
Median EV / 2016 Revenue Multiple
10.0x
8.0x
6.0x
4.0x
2.0x
0.0x
EV / 2016 Revenue Multiple
Mean 14.5%
Revenue Growth & EBITDA Margin
Median 17.2%
60%
50%
40%
30%
20%
10%
0%
'15-'16 Revenue Growth
2016 EBITDA Margin
Median '15-'16 Revenue Growth
Source: Capital IQ 9/22/16
Median 2016 EBITDA Margin
© 2016, Centaur Partners │Confidential │
6
IT Security Market Valuation – 2015
Mean 5.5x
Median 5.1x
TEV / Revenue
12.0x
10.0x
8.0x
6.0x
4.0x
2.0x
0.0x
EV / 2015 Revenue Multiple
Mean 25.0%
Mean EV / 2015 Revenue Multiple
Median EV / 2015 Revenue Multiple
Revenue Growth & EBITDA Margin
Median 23.9%
60%
50%
40%
30%
20%
10%
0%
14-'15 Revenue Growth
2015 EBITDA Margin
Median '14-'15 Revenue Growth
Source: Capital IQ 9/22/16
Median 2015 EBITDA Margin
© 2016, Centaur Partners │Confidential │
7
Top 10 Recent Security Software Transactions by Deal Size
Announced
2015-02-06
2016-09-07
Acquirer
Target
Target Abstract
Maker of military radios and air-traffic control equipment
Provider of security and networking solutions
($ in millions)
Val./Rev.
Total Deal
Amt.
Target TTM
Rev.
1.5x
5019.8
3314
7.8x
4,650
598
2016-09-07
Developer of proactive software solutions alongside
enhanced hardware to help stop attacks
5.7x
3,100
537
2015-03-02
Provides enterprise mobility solutions worldwide
3.3x
2651
812
Provider of security and networking solutions
5.1x
2400
467.2
2015-04-18
Develops software to protect organizations from cyber
attacks and data theft with security systems.
5.3x
1900
359.4
2016-07-07
Offers antivirus software for both consumers and
enterprises
2.9x
1,300
NA
Provides data security and payment card industry
compliance management solutions
6.7x
810
121.2
Provides flow-based network security, performance and
application monitoring solutions for enterprises.
34.5x
452.5
13.1
2015-10-27
Products for managing and securing mobile data and
devices in a business environment.
2.0x
425
211.9
2015-09-04
2015-03-19
2015-04-07
 IT security has remained as one of the hottest verticals within technology for M&A activity

There were 133 acquisitions in 2015, 109 in 2014, 100 in 2013, and 106 in 2012
 Symantec's $4.65B acquisition of BlueCoat is the largest IT security M&A transaction in 2016 thus far, whereas Harris’ acquisition
of Exelis was the largest in 2015 for $5.0B

Activity such as the TPG spinoff of Intel Security into Mcafee for $3.1B continues to push IT Security multiples into higher and higher
territory.
Source: CapIQ 9/22/16
© 2016, Centaur Partners │Confidential │
8
Top 10 Recent Security Software Transactions by Rev. Multiple
($ in millions)
Announced
Acquirer
Target Abstract
Val./Rev.
Total Deal
Amt.
Target TTM
Rev.
2015-10-27
Provides flow-based network security, performance and
application monitoring solutions for enterprises.
34.5x
452.5
13.1
2015-11-07
Leader in Data Science Powered™ Cloud Application
Security
24.1x
280
11.6
2015-05-06
Solutions for endpoint security and trusted infrastructure.
13.1x
114
8.7
2015-10-21
Provides network-based intrusion prevention systems
and appliances
13.0x
300
23
2015-10-19
Provides enterprise encryption and key management
services that enable corporations to protect their data.
11.4x
400
35.2
2015-10-07
E-signature solutions to help businesses of all sizes
prepare & sign documents quickly and securely
8.9x
85
9.6
2015-04-07
Provides data security and payment card industry
compliance management solutions
6.7x
810
121.2
5.7x
3,100
537
2016-09-07

Target
Developer of proactive software solutions alongside
enhanced hardware to help stop attacks
2015-04-18
Develops software to protect organizations from cyber
attacks and data theft with security systems.
5.3x
1900
359.4
2015-03-19
Provider of security and networking solutions
5.1x
2400
467.2
Since 2011, disclosed TEV / LTM Revenue multiples for IT security M&A transactions have been completed at a mean and median of 8.4x
and 7.5x, respectively

Median TEV / LTM Revenue multiples for IT security M&A has increased in 2015 over the previous year to 7.8x
 For 2014, IT security M&A transactions had a median TEV / LTM Revenue multiple of 3.7x
 For 2013, IT security M&A transactions had a median TEV / LTM Revenue multiple of 8.5x
Source: CapIQ 9/22/16
© 2016, Centaur Partners │Confidential │
9
M&A Activity of Selected Large Security Vendors
Selected Recent Acquisitions
Number of Acquisitions since 2013
Akamai
Bloxx, Xerocole, Prolexic Technologies, Velocius Networks, Verivue, FastSoft, Blaze Software
CA
Xceedium, IdmLogic, Grid-Tools, Rally Software, Agreed Escrow, Nolio, Layer 7 Technologies
Cisco
Synata, Leaba Semiconductor, CliQr Technologies, Jasper, Acano, 1 Mainstream, Lancope,
ParStream, Portcullis Computer Security, Pawaa Software, MaintenanceNet, OpenDNS, Piston
Cloud Computing, Tropo, Embrane, Neophapsis, Memoir Systems
Dell
EMC, Statsoft, Kobalt Music Group, enstratius, CREDANT Technologis, Gale Technologies,
Kitenga, Quest Sotware, MAKE Technologies, Clerity Solutions, Wyse Technology, SonicWALL
EMC
Virtustream, Cloudlink Technologies, Maginatics, Spanning Cloud Apps, VCE Company, The
Cloudscaling Group, TwinStrata, DSSD, Sky Socket, Xtreme Labs
Hewlett Packard Enterprise *
ActiveState's Stackato BU, NetCam Systems, ConteXtream, Mind Pirate, Aruba Networks,
Voltage Security, Eucalyptus Systems, Digital Risk, HIFLEX GmbH, H3C Technologies, Palm
IBM
Optevia, Resilient Systems, Resource Ventures, Ustream, Ecx.io, Truven Health Analytics,
Aperto, IRIS Analytics, Clearleap, Gravitant, The Weather Company's Product Unit, Cleversafe,
Deloitte's Revisionsaktieselskab, Meteorix, Advanced Application
Intel
Yogitech, Replay Technologies, Ascending Technologies, RealityCap, Saffron Technology,
Doces Power, Via's Baseband Processor Unit, Recon Instruments, Altera
Juniper
BTI Systems, WANDL, Webscreen Systems Limited, Contrail Systems, Mykonos Software,
SMobile Systems, Altor Networks, Trapeze Networks, Ankeena Networks, Funk Software
Oracle
Opower, Textura, Crosswise, Ravello, AddThis, Stack Engine, Maxymiser, DataLogix, Front
Porch, TOA Technologies, MICROS Systems, LiveLOOK, GreenBytes, Blue Kai
Symantec
0
10
20
2013
2014
30
2015
2016
40
50 Narus, Nitrodesk,Passwordbank Technologies, Odyssey Software, Nukona, LiveOffice, Clearwell
Systems, VeriSign (IAM div), PGP, GuardianEdge, MessageLabs, Gideon Technologies
TIBCO (Acquired by Vista Equity)
Mashery, Agape Creative, JasperSoft,Extended Results, StreamBase Systems, Maporama
Solutions, LogLogic Inc., Nimbus Partners Ltd., LoyaltyLab Inc., OpenSpirit Corp., Proginet Corp.
VMWare (Dell)
Immidio B.V., MomentumSI, Continuent, CloudVolumes, Third Sky, Airwatch, Desktone,
WaveMaker Software, Virsto Software, Pattern Insight, Nicira, DynamicOps, Wanova
Source: CapitalIQ, Crunchbase 9/22/16
© 2016, Centaur Partners │Confidential │
10
Top Ten Security Software Private Placements
($ in millions)
Announced
Target
Investors
Target Abstract
Total Deal
Amt.
2015-11-10
Accel Partners, Insight Venture Partners
Provides continuous network monitoring solutions to identify vulnerabilities,
reduce risk, ensure compliance, and respond to threats
250
2015-08-26
Andreessen Horowitz, Franklin Templeton
Investments, Institutional Venture Partners, TPG
Tanium is a security and systems management solution that allows real-time data
collection at enterprise scale
150
2015-11-25
Wellington Management
Develops cloud based network solutions for enterprises worldwide
135
2015-09-22
Fidelity, Baidu, Google Capital, Microsoft Ventures, Is a web performance and security company that provides online services to
protect and accelerate websites online
Qualcomm Ventures
110
2015-08-03
EMC, Lightspeed Venture Partners, Sand Hill East Operates a cloud-based Internet security platform
Ventures, TPG Growth
100
2015-07-13
Google Capital, Accel Partners, Warburg Pincus,
Rackspace
Provider of security technology and services
100
2016-02-03
Providence Equity Partners
Provides risk analytic tools for enterprise cyber security management
96
2015-06-25
NEA, JMI Equity, Accel, Split Rock Partners
Provides cloud endpoint data protection and security solutions to business
customers, including recognized brands in business and education
85
2015-12-25
Institutional Venture Partners; Felicis Ventures; GV;
Provides caller-ID products to detect, report, and mitigate phone fraud
Andreessen Horowitz; Citi.; Google Capital
75
2015-09-30
Highland Capital Partners; KPCB; Sequoia Capital;
Provides endpoint threat detection, response, and prevention solutions that
Blackstone; .406 Ventures; Founders Circle Capital
monitor and record various activities on servers and endpoints
LP; Evolution Equity Partners; Accomplice
67
Source: CapitalIQ, Crunchbase, 9/22/16
CBInsights Cybersecurity Report. September 2015
© 2016, Centaur Partners │Confidential │
11
Recent Private Placement Activity of Most Active Corporate VCs
Selected Recent Private Placements
Number of Private Placements since 2013
Cisco
Adbrain, Veniam, ActionPacked Networks, eSentire, Kii Corporation, Kumu Networks,
VelocCloud, Innovid, Platfora, WorldSensing S.L.N.E., Sensity Systems, 6Wind, Qwilt, Evrthng
Limited, Piston Cloud Computing, MuleSoft, Bit Stew Systems, Flashpoint Global, One
Mobikwik Systems, HyTrust, Innovid, CloudVelox, Team8, Alchemist Accelerator, Shanghai
Ketong, Stratoscale, Loggly, eSentire, ActionPacked Networks,Bolt
Cisco
Google
MAPR,Gusto,LendingClub,Armo Biosciences, Oscar Insurance, Uber, Cloudera, Flurish, Plexxi,
Shape Security, Alector, Nest, One Medical Group, Jet.com, Tiny RX, Udacity, ClassPass,
HiveMapper, SOCOMO Technologies, CollectiveHealth, Mobvoi, EmergentVR, Niantic,
Symphony Communication Services, Thumbtack,
Google
Intel
Inpria, Reflektion, MariaDB, IP Commerce, GigaSpace Technologies, Savioke, Trigence
Semiconductor, NextInput, SBA Materials, Eyefluence, Schoology, JBF Interlude, LISNR,
What3Words, Chargifi, Prieto Battery, Perfant Technology, Microprogram Information,
Sckipio, Parrallel Machines, Two Bit Circus, Arrayent
Intel
Microsoft
Microsoft
SnapLogic, Teambition, Uber, Cloudflare, Turbodealer,Nokia Teamkey, Innomedia, Kurerra,
SponsorByuro, FitnessClubs.Pro, Labrika,Tekhnovizor, Turbodealer, Otkrytoe kladbishe,
InsideSales.com, Unify Square, Reveal Chat, Playtabase, Wallflowr, ISI Technology,
Qualcom
m
Qualcomm
63Ideas InfoLabs,99 iFuture Systems, Airspan, Swift Navigation, MindTickle Interactive, Attune
Technologies, Bracket Computing, SJ Semiconductor, Kaleo Software, Reverie Language
Technologies, Loggi Tecnologia, Siklu Communication, YourStory Media, MyPoolin, Workspot,
Matterport, Curbside, WorldVu Satellites, MangoPlate, Meus Pedidos Software, Mantis Vision,
Cohesity, Bitbar Technologies, Zeek Mobile
Salesforc
e
0
50
100
2013
2014
150
2015
2016
200
250
Salesforce
Augment, QuBit Digital, Goodpatch, Crunchbase, Bloomreach, NewVoiceMedia, Buidscale,
Hottolink, FinanceApp, San San, Pierry, Fluidio, MapAnything, Full Circle Insights,
BrightFunnel, Toreta, Gainsight, Cogito, BizGround, Moneytree, FollowAnalytics, Uhuru,
SteelBrick, Pendo.io, Optimizely, Tectonic, Wrap Media
Source: CapitalIQ, Crunchbase 9/15/16
© 2016, Centaur Partners │Confidential │
12
Recent Private Placement Activity of Other Corporate VCs
Selected Recent Private Placements
Number of Private Placements since 2013
Adobe
Amazon
Dell
Ebay
IBM
HP
Enterp…
SAP
Seagate
Vmware
Workday
Western
Digital
0
5
10
2013
15
2014
2015
20
2016
25
30
Adobe
Gigya, Demandbase, PlayJam, Datalogics,Oversight Systems
Amazon
Sarvalova Services On Call,Twilio,Luma,Ionic Security Invoxia SAS, Musaic, Rachio,
Who What Wear, A & A Dukaan Financial, Dragon Innovation, alottazs labs,
QwikCilver Solutions, Wikia, Shanghai Yummy77, Acquia, Colis Prive, WhoSay,,
ParAccel, Cicekspeti Internet Hizmetleri, Foxit Software
Dell
Cylance, DocuSign, Exablox, Nexenta, Lastline, Invincea, CorrelSense, Skyera,
Mirantis, Qliance Medical Management
eBay
Korea Kakao, Giosis Gmarket, PT MetraPlasa, Jasper Infotech, Quikr, Ecomsual,
Ticketstreet, Appcelerator, Bypass Mobile, Shipwire
IBM
Digital Asset Holdings, WayBlazer, Pathway Genomics, Modernizing Medicine,
Welltok, Sellpoints, Fluid
HP
VenueNext, Hortonworks, Clique Intelligence,Coho Data,Tamr,Keen IO,SafeBreach
SAP
Fitbit, Box,Docusign, Mulesoft, ThreatConnect, Requisite Technology, Table 8,
TableNow, Alminder, Visage Mobile, Virtuestream, StayNTouch, Trove, Yapta, Room
77
Seagate
Ripple Labs, Reduxio Systems, Active Mind Technology, Egnyte, eASIC, The
Cloudscaling Group, Virident, DensBits Technologies, Coraid
VMWare
Aria Systems, Jfrog, Cenx, Zscaler, Blue Medora, HyTrust, Adallom, Jfrog, Puppet
Labs, Vorstack, Crittercism, Aria Systems, MongoDB, HyTrust
Workday
Tidemark Systems, Anaplan, Datameer
Western Digital
Tegile Systems, Amplidata, Avere Systems, Hightail, Everspin Technologies
Source: CapitalIQ, Crunchbase 9/15/16
© 2016, Centaur Partners │Confidential │
13
IT Security Comparable Analysis
Comparable Company Valuation Multiples
(US$ in millions, except per share values)
% 52-wk
Company
Ent. Val
FYE
Price
High
Dil
Shares
Cash &
Market Cap
ST
EV/Rev
EV/EBITDA
P/E
Debt
(Diluted)
2015A
2016E
2017E
2015A
2016E
2017E
2015A
2016E
2017E
NASDAQ:CHKP
Check Point Software Technologies Ltd.
31-Dec
$76.1
85%
178
$13,041
$1,327
$0
$11,714
7.2x
6.8x
6.4x
13.8x
12.4x
11.6x
19.9x
17.0x
15.7x
NYSE:PANW
Palo Alto Networks, Inc.
31-Jul
$152.6
78%
87
$13,862
$1,286
$508
$13,085
14.1x
9.5x
7.1x
NM
NM
NM
NM
NM
54.8x
NASDAQ:SYMC
Symantec Corp.
1-Apr
$25.1
99%
653
$15,610
$6,118
$3,204
$12,696
3.2x
3.5x
3.1x
19.0x
14.2x
9.5x
19.7x
6.8x
22.3x
NASDAQ:FTNT
Fortinet, Inc.
31-Dec
$36.4
78%
176
$6,284
$985
$0
$5,299
5.3x
4.1x
3.5x
NM
22.9x
18.2x
NM
52.0x
41.6x
TSE:4704
Trend Micro
31-Dec
$35.0
65%
138
$4,804
$1,211
$0
$3,568
3.4x
2.8x
2.6x
10.9x
9.1x
8.4x
26.7x
26.7x
23.3x
NASDAQ:PFPT
Proofpoint, Inc.
31-Dec
$76.1
94%
41
$3,198
$412
$356
$3,142
11.8x
8.7x
6.7x
NM
NM
NM
NM
NM
NM
NASDAQ:FEYE
FireEye, Inc.
31-Dec
$14.5
42%
158
$2,459
$917
$724
$2,266
3.6x
3.1x
2.7x
NM
NM
NM
NM
NM
NM
LSE:SOPH
Sophos
31-Mar
$3.5
91%
439
$1,589
$67
$325
$1,823
4.1x
3.8x
3.4x
NM
NM
NM
NM
NM
42.5x
NASDAQ:CYBR
Cyber-Ark Software
31-Dec
$50.7
86%
36
$1,703
$237
$0
$1,466
9.1x
6.9x
5.6x
NM
NM
22.0x
NM
47.6x
39.5x
NYSE:IMPV
Imperva, Inc.
31-Dec
$43.4
56%
32
$1,415
$255
$0
$1,160
5.0x
4.6x
3.9x
NM
NM
NM
NM
NM
NM
NasdaqGS:ALRM Alarm.Com
31-Dec
$26.9
81%
46
$1,228
$134
$7
$1,101
5.3x
4.5x
3.9x
NM
NM
20.9x
NM
53.7x
46.2x
NYSE:AVG
AVG Technologies NV
31-Dec
$25.0
100%
52
$1,267
$97
$219
$1,389
3.2x
3.2x
3.0x
10.7x
9.3x
7.8x
27.6x
12.9x
11.7x
NASDAQ:QLYS
Qualys, Inc.
31-Dec
$37.3
94%
38
$1,319
$214
$0
$1,105
6.7x
5.6x
4.7x
NM
17.2x
14.2x
NM
47.3x
40.4x
NYSE:CUDA
Barracuda Networks, Inc.
29-Feb
$24.9
89%
53
$1,296
$167
$4
$1,133
4.1x
3.5x
3.3x
NM
NM
18.1x
NM
NM
43.4x
NASDAQ:VDSI
VASCO Data Security International, Inc.
31-Dec
$18.8
88%
40
$749
$136
$0
$613
2.5x
2.9x
2.5x
11.2x
18.4x
13.1x
17.7x
31.1x
21.9x
NASDAQ:VRNS
Varonis Systems, Inc.
31-Dec
$30.3
99%
26
$801
$108
$0
$692
5.4x
4.3x
3.6x
NM
NM
NM
NM
NM
NM
NasdaqGM:RPD
Rapid7
31-Dec
$17.5
70%
39
$734
$85
$0
$649
5.9x
4.2x
3.3x
NM
NM
NM
NM
NM
NM
NasdaqGS:MIME Mimecast Limited
31-Mar
$16.0
88%
46
$870
$109
$5
$767
6.6x
5.4x
4.4x
NM
NM
NM
NM
NM
NM
NYSE:ATEN
A10 Networks
31-Dec
$10.5
100%
64
$693
$114
$0
$580
2.9x
2.5x
2.2x
NM
NM
NM
NM
NM
NM
NASDAQ:MOBL
MobileIron
31-Dec
$2.7
20%
82
$227
$85
$0
$142
1.0x
0.9x
0.8x
NM
NM
NM
NM
NM
NM
Mean:
5.5x
4.5x
3.8x
13.1x
14.8x
14.4x
22.3x
32.8x
33.6x
Median:
5.1x
4.2x
3.4x
11.2x
14.2x
13.7x
19.9x
31.1x
39.9x
Source: Capital IQ 9/22/16
N/M = not meaningful/multiple outside of relevant range,
N/A = Not Applicable
© 2016, Centaur Partners │Confidential │
14
IT Security Comparable Analysis (cont.)
Comparable Company Operating Metrics
(US$ in millions, except per share values)
Revenue Growth
Company
14-'15
15-'16
MRQ Gross
EBITDA Margin
FCF Margin
16-'17
Margin
2015A
2016E
2017E
2015A
2016E
2017E
Check Point Software Technologies Ltd.
9%
6%
6%
89%
52%
55%
55%
41%
53%
51%
Palo Alto Networks, Inc.
55%
49%
33%
75%
NA
NA
24%
26%
29%
40%
Symantec Corp.
-5%
-9%
13%
83%
17%
25%
33%
3%
30%
NA
Fortinet, Inc.
31%
27%
19%
73%
6%
18%
19.1%
19%
23%
27%
Trend Micro
8%
25%
7%
81%
32%
30%
31%
9%
18%
21%
Proofpoint, Inc.
36%
37%
29%
70%
NA
7%
9%
28%
10%
16%
FireEye, Inc.
46%
16%
15%
61%
NA
NA
3%
18%
NA
7%
Sophos
18%
7%
14%
78%
14%
8%
13%
NA
6%
16%
Cyber-Ark Software
56%
32%
23%
86%
22%
26%
26%
31%
26%
28%
Imperva, Inc.
43%
7%
20%
78%
NA
NA
NA
16%
NA
3%
Alarm.Com
25%
17%
15%
61%
14%
18%
18.7%
7%
6%
9%
AVG Technologies NV
14%
1%
7%
81%
30%
34%
38%
20%
20%
25%
Qualys, Inc.
23%
21%
19%
79%
24%
32%
33%
19%
24%
25%
Barracuda Networks, Inc.
19%
15%
7%
77%
3%
3%
18%
25%
20%
15%
VASCO Data Security International, Inc.
20%
-13%
15%
71%
23%
16%
19%
26%
8%
12%
Varonis Systems, Inc.
26%
26%
19%
90%
NA
NA
NA
1%
3%
3%
Rapid7
44%
40%
27%
75%
NA
NA
NA
4%
3%
6%
Mimecast Limited
31%
22%
23%
73%
8%
6%
6%
6%
7%
2%
A10 Networks
11%
17%
13%
75%
NA
1%
6%
7%
3%
4%
MobileIron
13%
8%
12%
79%
NA
NA
NA
NA
NA
NA
Mean:
26%
17%
17%
77%
20%
20%
22%
17%
17%
17%
Median:
24%
17%
15%
77%
19%
18%
19%
19%
18%
15%
Source: Capital IQ 9/22/16
N/M = not meaningful/multiple outside of relevant range,
N/A = Not Applicable
© 2016, Centaur Partners │Confidential │
15
IT Security Comparable Analysis (cont.)
Comparable Company Estimates
(US$ in millions, except per share values)
Revenue
EBITDA
2017E
2015A
2016E
2017E
2015A
2016E
MRQ
2015A
2016E
2017E
Check Point Software Technologies Ltd.
$1,496
$1,630
$1,725
$1,826
$852
$947
$1,007
$3.83
$4.47
$4.83
10%
$669
$921
$933
06/16
$423
$375
$598
$928
$1,379
$1,834
($105)
($147)
$434
($2.02)
($2.59)
$2.78
46%
$239
$406
$730
07/16
$401
$299
$4,183
$3,956
$3,600
$4,080
$669
$892
$1,341
$1.27
$3.71
$1.12
11%
$136
$1,075
($1,052)
07/16
$884
$735
Fortinet, Inc.
$770
$1,009
$1,279
$1,521
$56
$231
$291
$0.05
$0.70
$0.88
17%
$193
$290
$415
06/16
$311
$227
Trend Micro
$962
$1,034
$1,293
$1,383
$326
$391
$427
$1.31
$1.31
$1.50
10%
$97
$232
$294
06/16
$302
$246
Proofpoint, Inc.
$196
$265
$363
$468
($56)
$25
$44
($2.68)
$0.09
$0.37
30%
$75
$37
$75
06/16
$90
$63
FireEye, Inc.
$426
$623
$722
$832
($396)
($91)
$25
($3.50)
($1.32)
($0.56)
29%
$114
($79)
$57
06/16
$175
$108
Sophos
$379
$447
$478
$543
$65
$40
$72
($0.15)
($0.16)
$0.08
0%
($5)
$30
$85
03/16
$122
$95
Cyber-Ark Software
$103
$161
$213
$260
$35
$55
$67
$0.80
$1.07
$1.28
20%
$49
$56
$73
06/16
$50
$43
Imperva, Inc.
$164
$234
$250
$301
($43)
($18)
($2)
($1.64)
($0.80)
($0.22)
24%
$38
($12)
$8
06/16
$58
$45
Alarm.Com
$167
$209
$245
$282
$30
$43
$53
($0.30)
$0.50
$0.58
17%
$14
$14
$26
06/16
$64
$39
AVG Technologies NV
$374
$428
$434
$464
$130
$149
$178
$0.90
$1.94
$2.13
10%
$87
$85
$114
06/16
$105
$85
Qualys, Inc.
$134
$164
$198
$235
$39
$64
$78
$0.47
$0.79
$0.92
15%
$31
$47
$59
06/16
$48
$38
Barracuda Networks, Inc.
$234
$277
$320
$344
$8
$8
$63
($1.30)
($0.08)
$0.57
21%
$70
$64
$51
05/16
$87
$66
VASCO Data Security International, Inc.
$202
$241
$210
$242
$55
$33
$47
$1.07
$0.61
$0.86
26%
$63
$17
$29
06/16
$54
$39
Varonis Systems, Inc.
$101
$127
$160
$190
($17)
($6)
($2)
($0.84)
($0.34)
($0.21)
0%
$2
$4
$6
06/16
$39
$35
Rapid7
$77
$111
$155
$196
($39)
($32)
($29)
($4.00)
($0.90)
($0.76)
25%
$4
$5
$12
06/16
$37
$28
Mimecast Limited
$88
$116
$142
$174
$9
$8
$10
$0.01
($0.08)
$0.02
18%
$8
$9
$4
06/16
$41
$30
A10 Networks
$180
$199
$233
$263
($28)
$2
$16
($0.64)
($0.09)
$0.09
24%
$15
$7
$12
06/16
$57
$43
MobileIron
$132
$149
$161
$179
($69)
($33)
($18)
($1.07)
($0.44)
($0.21)
0%
($14)
($25)
($6)
06/16
$39
$31
Source: Capital IQ 9/22/16
N/M = not meaningful/multiple outside of relevant range,
N/A = Not Applicable
LTG
FCF
2014A
Symantec Corp.
2016E
EPS
Company
Palo Alto Networks, Inc.
2015A
EPS
2017E
End
Revenue Gross Profit
© 2016, Centaur Partners │Confidential │
16
Recent IT Security Private Placements
($ in millions)
Announced
Target
Investors
Target Abstract
Total Deal
Amt.
2016-08-08
Jumio Corporation
Millennium Technology Venture Partners,Centenna Growth Partners,
Developers and delivers digital ID verification and scanning solutions
15.9
2016-04-20
Anomali
Institutional Venture Partners, General Catalyst, Google Ventures, Paladin Capital Group
Threat intelligence platform that correlates tens of millions of threat indicators against your real time
network activity logs and up to a year or more of forensic log data
30.0
2016-03-15
Skyport Systems
Intel Capital, Sutter Hill Ventures, Index Ventures, InstantScale Ventures, Northgate Capital,
Thomvest Ventures, Cisco Investments, GV
Develops hyper-secured infrastructure that ensures the security of mission-critical IT and corporate
assets
30.0
2016-02-25
Signifyd
QED Investors, IA Ventures, Allegis Capital, Menlo Ventures
Provides enterprise-grade fraud technology solutions for e-commerce stores
20.0
2016-02-25
enSilo
Rembrandt Venture Partners, Lightspeed Venture Partners, Carmel Ventures
Offers a real-time targeted attack exfiltration prevention platform and protects data from threat actors
19.0
2016-02-11
InAuth
Bain Capital Ventures, Commerce Ventures
offers mobile authentication and anti-fraud solutions for financial institutions and the mobile transaction
market.
29.9
2016-02-03
Skybox Security
Providence Equity Partners
Provides risk analytic tools for enterprise cyber security management
96.0
2016-02-03
eSentire, Inc.
Georgian Partners, Edison Partners, Cisco Investments, Information Venture Partners,
Northleaf Venture Catalyst Fund
Provides information security solutions and protects enterprises from advanced cyber threats
19.5
2016-02-01
Kaymera Technologies
Foundation Capital, Gilat opponent, Eddy Shalev
mobile cyber defense system providing organizations with a solution to defend against mobile threat
vectors
10.0
2016-01-28
Pindrop Security, Inc.
Google Capital, Felicis Ventures, Citi Ventures, IVP, Andreessen Horowitz, GV
provides anti-fraud solutions for audio-based authentication and threat detection
75.0
2016-01-13
Appthority
Knollwood Investment Advisory, Blue Coat Systems
App-risk management service that helps enterprises identify and manage the risks hidden in mobile apps
10.0
2016-01-12
Smashfly
Bessemer Venture Partners, OpenView Venture Partners
Marketing Automation for Recruiting (Recruitment Marketing)
22.0
2016-01-12
Shape Security
Northern Light Venture Capital, Baseline Ventures, Epic Ventures
Offers cybersecurity software to prevent automated web and mobile attacks
25.0
2015-01-21
ForeScout Technologies
Wellington Management
Allows control of network-connected devices and orchestrate information sharing and operation among
disparate security tools
76.0
2015-01-21
Malwarebytes
Fidelity Investments
Develops anti-malware technologies to detect and remove malicious programs from PCs
50.0
66.0
2015-12-16
Digital Guardian
General Electric Pension Trust, Siemens Venture Capital
Offers data loss prevention solution that automatically blocks and controls only those behaviors that pose
a threat to organization based on the user, event, and data type
2015-11-25
ForeScout Technologies
NA
Develops cloud based network solutions for enterprises worldwide
135.0
2015-11-10
Tenable Network Security
Accel Partners, Insight Venture Partners
Provides continuous network monitoring solutions to identify vulnerabilities, reduce risk, ensure
compliance, and respond to threats
250.0
2015-10-14
Area 1 Security
First Round, Data Collective
Develops threat intelligence solution for eliminating targeted socially engineered cyber attacks.
15.0
54.5
14.5
2015-10-14
Bit9
Kleiner Perkins, Evolution Equity, Founders Circle, Highland Capital, .406 Ventures
Provides endpoint threat detection, response, and prevention solutions that monitor and record various
activities on servers and endpoints to detect and stop cyber threats that evade traditional defenses
2015-10-13
Datavisor
NEA, GSR Ventures
Develops big data solutions that predict attack vectors among various users and accounts
Source: CapitalIQ, Crunchbase, PEHub 9/22/16
(*) denotes low growth and low margins
(**) denotes financial data based on Centaur estimates
© 2016, Centaur Partners │Confidential │
17
Recent IT Security Private Placements (cont.)
($ in millions)
Announced
Target
Investors
Target Abstract
Total Deal
Amt.
2015-10-13
SentinelOne
Data Collective, SineWave Ventures, Tiger Global Management, Granite Hill
Capital Partners
Provides endpoint security solutions
25.0
2015-10-13
Cybereason
Spark Capital, CRV, SoftBank
Operates an automated platform to detect, visualize, and terminate cyber attacks.
59.0
Provides cloud endpoint data protection and security solutions to business customers and
organizations, including recognized brands in business and education.
85.0
2015-10-06
Code42
NEA, JMI Equity, Accel, Split Rock Partners
2015-09-30
Vectra Networks
AME Cloud Ventures, Juniper Networks, Intel Capital, IA Ventures, Accel, Khosla
Develops an X-series platform that instantly identifies cyber attacks in organizations.
Ventures
35.0
2015-09-30
Exabeam
Icon Ventures, Aspect Ventures, Norwest Venture Partners
Offers data security solutions.
25.0
2015-09-29
Tanium, Inc.
Institutional Venture Partners, TPG
Security and systems management solution that allows real-time data collection at
enterprise scale
120.0
2015-09-22
Zscaler, Inc.
NA
2015-09-22
CloudFlare
Fidelity, Baidu, Google Capital, Microsoft Ventures, Qualcomm Ventures
Integrated, cloud-delivered Internet security
10.0
is a web performance and security company that provides online services to protect and
accelerate websites online.
110.0
10.0
2015-09-21
Morphick Cyber Security Orchard Holding Group
platform-enabled managed service to enable their customers to prevent, detect, and
respond to even the most advanced attacks.
2015-09-15
Onapsis
.406 Ventures, Arsenal Venture Partners, Evolution Equity, Schlumberger
provides the most comprehensive solutions for securing SAP and Oracle enterprise
applications
17.0
2015-09-03
Netskope
The Social+Capital Partnership, Lightspeed Venture Partners, Accel Partners,
Iconiq Capital
Addressing the issue of rapid cloud adoption by enterprises, Netskope performs deep
usage analytics and enforces business and security policies in cloud apps
75.0
2015-08-12
AlienVault
Institutional Venture Partners, KPCB, Trident Capital, GGV Capital
Provides unified securitymanagement and crowd-sourced threat intelligence solutions
55.0
2015-08-03
Zscaler, Inc.
EMC, Lightspeed Venture Partners, Sand Hill East Ventures, TPG Growth
Operates a cloud-based Internet security platform.
100.0
2015-07-28
Cylance, Inc.
Capital One Ventures, Dell Corporate Ventures, Draper Fisher Jurvetson, Draper
Provides enterprise, critical infrastructure, and embedded dcyber security solutions to
Nexus Venture Partners, Fairhaven Capital Partners, Khosla Ventures, KKR & Co,
companies, governments, and end users.
Ten Eleven Ventures, The Blackstone Group, Thomvest Ventures
42.0
2015-07-22
DarkTrace
Summit Partners
world leader in Enterprise Immune System technology
22.5
2015-07-13
CrowdStrike, Inc.
Google Capital, Accel Partners, Warburg Pincus, Rackspace
provider of security technology and services
100.0
2015-06-30
Venafi
Intel Capital, Silver Lake Partners, QuestMark Partners
a cyber security company, provides enterprise key and certificate management security
solutions.
39.0
2015-06-25
Checkmarx
Institutional Venture Partners
Provides next generation Static Code Analysis solutions which identify security
vulnerabilities within application's source code.
84.0
2015-05-19
CounterTack, Inc.
Alcatel-Lucent, Arsenal Ventures, Fairhaven Capital, Goldman Sachs, Razor's
Edge, Siemens Venture
Provides real-time endpoint threat detection and response solutions to enterprises and
government organizations.
14.9
2015-05-11
Electronic Warfare
Associates
American Capital
Provider of electronic warfare, cyber security and commercial test tools systems
21.5
Source: CapitalIQ, Crunchbase, PEHub 9/22/16
(*) denotes low growth and low margins
(**) denotes financial data based on Centaur estimates
© 2016, Centaur Partners │Confidential │
18
Recent IT Security Private Placements (cont.)
($ in millions)
Announced
Target
Investors
Target Abstract
Total Deal
Amt.
2015-05-05
Cybereason
CRV, Lockheed Martin, Spark Capital
Automated Endpoint Detection and Response platform identifies in real all the elements of
cyber attacks for effective response
25.0
2015-04-17
Flashpoint Global
Cisco, Greycroft Partners, Bloomberg Beta, TechOperators
Provides software and data services to enhance cyber and physical security of companies
and governments
5.0
2015-04-16
Recorded Future
Google Ventures, In-Q-Tel, Reed Elsevier Ventures, Balderton Capital
Provides threat intelligence analytics platform
12.0
30.0
2015-04-15
Skyport Systems
Index Ventures, Intel Capital, Sutter Hill Ventures
Develops enterprise security and hyper-secured infrastructure solutions for critical IT and
corporate assets.
2015-04-15
UniKey
Samsung Ventures, ff Venture Capital, Broadway Angels, Acxit Capital Partners
Develops passive access control products that include a Smartphone app that allows
users to set-up touch-to-open locks
10.0
2015-04-14
Illumio
Andreessen Horowitz, General Catalyst Partners, Accel Partners, BlackRock,
Valor Capital, Formation 8
Offers cloud security internet services
100.5
2015-04-14
Rubicon Labs
Akamai Technologies, Pelion Venture Partners, Third Point Ventures
Develops secure communication technologies for cloud-based data centers and the
emerging Internet of Things (IoT) market.
11.7
2015-04-14
Duo Security
Benchmark, Google Ventures, True Ventures, Redpoint Ventures, Radar Partners Provides two-factor authentication as a service to prevent account takeover and data theft.
30.0
2015-04-14
Adallom
Hewlett Packard Ventures, Index Ventures, Sequoia Capital, Rembrandt Venture Develops security solutions for sensitive and regulated data
30.0
2015-04-08
Palerra
August Capital, Norwest Venture Partners, Wing Venture Partners
provides security coverage for cloud platforms in North America and internationally
17.0
2015-04-08
Niara, Inc.
Index Ventures, New Enterprise Associates, Venrock
Develops and offers cyber and enterprise security software
20.0
2015-04-07
CliQr
Google Ventures, Translink Capital, Polaris Partners, Foundation Capital
Its cloud app management platform enabling companies to manage and secure apps onto
clouds
20.0
2015-04-06
RedSeal
Venrock, Sutter Hill Ventures, Math Venture Partners, Pallasite, Tyco
Develops security risk management (SRM) software and solutions and helps companies
eliminate cyber threats.
17.0
2015-04-01
HyTrust, Inc.
Provides comprehensive solution for virtual infrastructure
25.0
52.0
AITV, Cisco, EPIC Ventures, Granite Ventures, Trident Capital, Vanedge Capital
2015-03-31
Tanium, Inc.
ND
Is a security and systems management solution that allows real-time data collection at
enterprise scale.
2015-03-18
Interset
Anthem Venture, Informatica, Telesystem, Toba Capital
An enterprise threat detection company
NA
2015-03-17
Dacktrace
Hoxton Ventures, Talis Capital, Invoke Capital
is a world leader in Enterprise Immune System technology
18.0
2015-03-11
Elastica
Pelion Venture, Mayfield Fund, Third Point Ventures
Offers data science powered SaaS app/cloud service security
30.0
2015-02-19
Synack
Icon Ventures, GGV Capital
Offers a security solution offering scalable continuous testing for enterprise applications
and networks
25.0
2015-02-18
PinDrop Security, Inc.
IVP, Andreessen Horowitz, Citi Ventures, Felicis Ventures, Redpoint Ventures
Provides anti-fraud authentication technology solutions for financial institutions' call
centers
35.0
Source: CapitalIQ, Crunchbase, PEHub 9/22/16
(*) denotes low growth and low margins
(**) denotes financial data based on Centaur estimates
© 2016, Centaur Partners │Confidential │
19
Recent IT Security M&A Transactions
($ in millions)
Announced
Acquirer
Target
Target Abstract
Val./Rev.
Total Deal
Amt.
Target TTM Rev.
2016-07-22
Core Security Technologies Dambella Inc.
Provides threat protection solutions to enterprises via passive sensors and initiates a response to stop data
theft
NA
NA
NA
2016-06-07
Fortinet
AccelOps
Provides deeps analytics for a combined purpose of network performance and security management
NA
32.0
NA
2016-04-18
Alert Logic
Click Security
Provides real-time security analytics that enable businsses to detect subtle changes in behavior that are
often the signs of an advanced attack
NA
NA
NA
2016-04-08
Lookout
Bluebox Security
Offers software that secures company data as it interacts with employee mobile devices, apps and services
NA
NA
NA
2016-04-05
ServiceNow
ITApp
Offers hybrid cloud management software that allows customers to consume public cloud while keeping data
private and secure
NA
NA
NA
2016-04-05
Barracuda Networks
Sookasa
Provides encryption and compliance for sensitive files across cloud storage services and mobile devices
NA
NA
NA
2016-02-29
MNP
Nci.ca
Provides cyber security products, services, and solutions
NA
NA
NA
2016-02-29
IBM
Resilient Systems
Automates and orchestrates the many processes needed when dealing with cyber incidents
NA
NA
NA
2016-02-24
BlackBerry
Encription
Is a cyber security consultancy that provides IT training courses for enterprises
NA
NA
NA
2016-02-15
Strategic IP Information Pte.
VeriSite Global
Ltd/VeriSite Global
Provides risk-relevant intelligence online solutions
NA
NA
NA
2016-02-11
Mountain Acquisition
Company
Provides professional, commercial, and residential intrusion and fire alarm systems
NA
NA
NA
NA
NA
NA
Eagle Security Systems
2016-02-08
Bessemer Venture Partners Digital Footprints International
Provides security solutions for detecting, diagnosing, and mitigating Internet threats that include phising,
malware attacks, and domain name system (DNS) hijacking for enterprises
2016-01-20
FireEye
iSight Partners
Provides cyber threat intelligence solutions
NA
268
NA
2016-01-14
Websense-Raytheon
Stonesoft
Provides intrusion/evasion prevention
NA
NA
NA
2016-01-12
Cyber Risk Management
APTEC
Provides identity governance, access management, and database security solutions
NA
NA
NA
2016-01-05
HARMAN
TowerSec
Develops embedded software security products to protect vehicles from hacking and intrusions
NA
NA
NA
2015-11-09
Microsoft
Secure Islands Technology
Develops advanced policy-based data classification and protection solutions.
NA
77.5
NA
2015-11-07
Blue Coat Systems
Elastica
Leader in Data Science Powered™ Cloud Application Security
24.1
280
11.6
2015-11-04
Proofpoint
Socialware
Provides software to market through social media, and generate business through CRM
NA
9
NA
2015-10-27
Cisco
Lancope
Provides flow-based network security, performance and application monitoring solutions for enterprises.
34.5
452.5
13.1
2015-10-21
Trend Micro
TippingPoint Technologies
Provides network-based intrusion prevention systems and appliances
13.0
300
23
2015-10-19
Thales e-Security
Vormetric
Provides enterprise encryption and key management services that enable corporations to protect their data.
11.4
400
35.2
Source: CapitalIQ, Crunchbase, PEHub 9/22/16
(*) denotes low growth and low margins
(**) denotes financial data based on Centaur estimates
© 2016, Centaur Partners │Confidential │
20
Recent IT Security M&A Transactions (Cont.)
($ in millions)
Announced
Acquirer
Target
Target Abstract
Val./Rev.
Total Deal
Amt.
Target TTM Rev.
2015-10-08
LogMeIn
LastPass
Is a free password manager and form filler optimized for Firefox, Internet Explorer, Opera
and Safari.
NA
125
NA
2015-10-07
VASCO Data Security
Silanis
E-signature solutions to help businesses of all sizes prepare & sign documents quickly and
securely
8.9
85
9.6
2015-10-07
CyberArk
Viewfinity
Security solutions to cyber threats, preventing attack escalation
NA
30.5
NA
2015-10-06
Raytheon
Foreground Security
Is a dedicated cyber security company.
NA
NA
NA
2015-10-06
Digital Guardian
Code Green Networks
Provides data loss prevention and content security solutions for enterprises.
NA
NA
NA
2015-09-16
The Carlyle Group
Coalfire
Provides risk assessments, testing and implementation security solutions for technologyrelated businesses.
NA
NA
NA
2015-09-04
BlackBerry
Good Technology
Products for managing and securing mobile data and devices in a business environment.
2.0
425
211.9
2015-08-04
CA Technologies
Xceedium
Offers zero trust privileged access management solutions meeting the security and
compliance needs
NA
NA
NA
2015-07-09
Avast Software
Remotium
Provider of enterprise security services to protect mobile devices.
NA
NA
NA
2015-06-30
Cisco
OpenDNS
Provides Internet security and domain name system services to secure the networks
NA
NA
NA
2015-06-03
Cisco
Piston Cloud Computing
Provides Piston OpenStack that automates the orchestration of a private cloud environment
NA
NA
NA
2015-05-28
ARM
Sansa Security
Internet of Things (IoT) security platform securing everything from chipsets to the cloud.
NA
75
NA
2015-05-26
Mitek Systems
Idchecker
Combining easy document capturing and strong consumer authentication in one solution
NA
10.6
NA
2015-05-21
Elbit Systems
NICE Systems' Cyber and
Intelligence Division
Provides law enforcement organizations with software for creating communication intelligence
NA
158
NA
2015-05-06
Rohde & Schwarz
Sirrix AG
Solutions for endpoint security and trusted infrastructure.
13.1
114
8.7
2015-05-06
AVG Technologies
Privax
Its virtual private network that provides its users with secure browsing services
NA
60
2015-05-05
Information Innovators
Creative Computing Solutions
Provides solutions in cyber security, health services, and program management support
-
-
-
2015-04-18
Raytheon
Websense
Develops software to protect organizations from cyber attacks and data theft with security
systems.
5.3
1900
359.4
2015-04-07
SingTel
Trustwave
Provides data security and payment card industry compliance management solutions
6.7
810
121.2
2015-04-06
Akamai Technologies
Octoshape
Content delivery service that provides global infrastructure, which deliver video via the
Internet.
NA
NA
NA
Announced Acquirer Target Target Abstract
Val./Rev. Total Deal Amt. Target TTM Rev.
Source: CapitalIQ, Crunchbase, PEHub 9/22/16
(*) denotes low growth and low margins
(**) denotes financial data based on Centaur estimates
© 2016, Centaur Partners │Confidential │
21
Recent IT Security M&A Transactions (Cont.)
($ in millions)
Announced
Acquirer
Target
Target Abstract
Val./Rev.
Total Deal
Amt.
Target TTM Rev.
2015-04-02
Check Point Software
Lacoon
Offers a solution that assesses mobile risks
NA
NA
NA
2015-04-01
Salesforce.com
Toopher
Provides a location-based multifactor authentication solution that prevents online fraud and
identity theft
NA
NA
NA
2015-03-19
Rakuten
Yieldex
Provides a cross-channel revenue and inventory management platform
NA
NA
NA
2015-03-19
Opera Software
SurfEasy
Portable password-protected web browser that encrypts Internet traffic
NA
NA
NA
2015-03-19
Bain Capital
Blue Coat
Provider of security and networking solutions
5.1
2400
467.2
2015-03-05
PayPal
CyActive
Predictive cyber security company
NA
NA
NA
2015-03-04
IBM
AlchemyAPI
Specializes in artificial intelligence-based text analysis cloud services.
NA
NA
NA
2015-03-02
Proofpoint
Emerging Threats Pro
Designs and develops security software.
NA
NA
NA
2015-03-02
Akamai Technologies
Xerocole
Operates as an intelligent broadband domain name system (DNS) company.
NA
NA
NA
2015-03-02
Hewlett-Packard
Aruba Networks
Provides enterprise mobility solutions worldwide
3.3
2651
812
2015-02-20
Box
Airpost.io
Provides a cloud security dashboard and activity monitor
NA
NA
NA
2015-02-18
Check Point Software
Hyperwise
Providing solutions to combat APT attacks
NA
80
NA
2015-02-09
Hewlett-Packard
Voltage Security
Provides solutions for combating security threats
NA
NA
9.7
2015-02-06
Harris
Exelis
Maker of military radios and air-traffic control equipment
1.5
5019.8
3314
2015-01-13
Bottomline Technologies Intellinx
Develops behavior tracking solutions.
NA
84.84
NA
2015-01-12
Symantec
Narus
Provides cybersecurity data analytics solutions for enterprises, carriers, and governments
worldwide.
NA
NA
11.5
2014-12-19
Accumli Security
RandomStorm
Solutions for vulnerability management and network security along with security services
NA
13.5
NA
2014-12-11
Datto
Backupify
Is a backup technology provider for cloud-based data, offering archiving, search and restore
solutions
NA
NA
NA
2014-12-09
Belden
Tripwire
Provider of advanced threat, security and compliance solutions
8.2
710
86.2
2014-12-02
SS&C Technologies
DST Global Solutions
Offers fraud detection and management
1.3
95
70.4
Source: CapitalIQ, Crunchbase, PEHub 9/22/16
(*) denotes low growth and low margins
(**) denotes financial data based on Centaur estimates
© 2016, Centaur Partners │Confidential │
22
Recent Technology IPOs
(US$ in millions, except per share values)
Current
Price
IPO Range
As of IPO
EV/FTM
Rev.
Rev.
LTM Rev
FTM Rev.
% Rev. MRQ Gross
Growth Margin %
Industry
IPO Date
TLND
Talend SA
Software
7/29/2016
25.04
15.00
17.00
18.00
5.3
94.5
46%
16.8
0.2x
0.1x
88.7
117.8
33%
75%
LN
LINE Corporation
Internet
7/14/2016
44.05
26.20
29.34
32.35
22.0
1,125.2
33%
-482.3
0.0x
-0.3x
131,540.6
1,662.0
-99%
34%
TWLO
Twilio Inc.
Software
6/23/2016
64.92
12.00
14.00
15.00
10.0
150.0
273%
67.5
0.3x
0.3x
192.9
253.1
31%
56%
SCWX
SecureWorks Corp.
IT Security
4/22/2016
13.49
15.50
17.50
14.00
8.0
112.0
-4%
-106.2
-0.3x
-0.2x
339.5
444.0
31%
49%
TEAM
Atlassian Corporation Plc.
Software
12/9/2015
29.48
16.50
18.50
21.00
22.0
462.0
40%
2,456.7
7.0x
5.5x
353.4
448.8
27%
83%
SQ
Square, Inc.
Payments
11/18/2015
11.27
11.00
13.00
9.00
27.0
243.0
25%
1,194.0
1.0x
0.8x
1,143.7
1,463.8
28%
34%
MIME
Mimecast Limited
IT Infrastructure
11/18/2015
17.15
10.00
12.00
10.00
7.8
77.5
72%
294.3
2.3x
2.0x
128.4
150.4
17%
73%
INST
Instructure, Inc.
SaaS
11/12/2015
23.74
16.00
18.00
16.00
4.4
70.4
48%
125.2
1.9x
1.3x
65.1
95.1
46%
71%
IOTS
Adesto Technologies Corporation
IT Infrastructure
10/26/2015
2.28
10.00
12.00
5.00
5.0
25.0
-54%
75.4
1.8x
1.4x
41.8
52.2
25%
46%
PSTG
Pure Storage, Inc.
IT Storage
10/6/2015
12.18
16.00
18.00
17.00
25.0
425.0
-28%
209.9
0.8x
0.4x
273.8
477.2
74%
65%
RPD
Rapid7, Inc.
IT Security
7/16/2015
16.92
13.00
15.00
16.00
6.5
103.2
6%
532.1
5.8x
4.6x
91.6
116.0
27%
75%
SOPH
Sophos Group plc
IT Security
6/30/2015
2.60
0.00
0.00
3.54
156.2
553.8
-27%
1,762.0
3.9x
3.6x
456.3
483.5
6%
-
XTLY
Xactly Corporation
SaaS
6/25/2015
14.26
10.00
12.00
8.00
7.0
56.3
78%
192.2
3.0x
2.5x
63.7
77.4
22%
61%
APPF
AppFolio, Inc.
IT Infrastructure
6/25/2015
18.34
12.00
14.00
12.00
6.2
74.4
53%
322.6
6.0x
3.7x
53.7
87.9
64%
57%
ALRM
Alarm.Com Holdings, Inc.
IT Security
6/25/2015
24.99
13.00
15.00
14.00
7.0
98.0
79%
557.6
3.2x
2.7x
176.5
208.7
18%
61%
SHOP
Shopify Inc.
Cloud Infrastructure
5/20/2015
41.04
12.00
14.00
17.00
7.7
130.9
141%
1,177.1
9.5x
6.9x
123.6
170.2
38%
53%
APIC
Apigee Corporation
Cloud Infrastructure
4/23/2015
17.39
16.00
18.00
17.00
5.1
87.0
2%
394.8
6.4x
5.3x
61.9
74.9
21%
71%
ETSY
Etsy, Inc.
Internet
4/15/2015
13.64
14.00
16.00
16.00
16.7
266.7
-15%
1,695.1
7.9x
5.7x
213.6
298.5
40%
66%
GDDY
GoDaddy Inc.
IT Infrastructure
3/31/2015
32.10
17.00
19.00
20.00
20.5
460.0
61%
2,395.2
1.7x
1.4x
1,443.4
1,656.0
15%
64%
BOX
Box, Inc.
IT Storage
1/22/2015
13.67
11.00
13.00
14.00
12.5
175.0
-2%
1,677.1
8.7x
6.5x
192.6
258.8
34%
71%
WK
Workiva Inc.
IT Infrastructure
12/11/2014
17.94
13.00
15.00
14.00
7.2
100.8
28%
184.0
1.7x
1.4x
106.1
128.9
21%
71%
LC
LendingClub Corporation
Internet
12/10/2014
5.36
10.00
12.00
15.00
58.0
870.0
-64%
4,910.2
27.8x
14.8x
176.5
330.7
87%
81%
CNXR
Connecture, Inc.
Internet
12/11/2014
1.65
12.00
14.00
8.00
6.6
53.1
-79%
169.1
2.1x
1.9x
81.7
89.9
10%
29%
NEWR
New Relic, Inc.
Internet
12/11/2014
36.14
18.00
20.00
23.00
5.0
115.0
57%
945.1
11.1x
8.0x
85.0
118.6
40%
80%
HDP
Hortonworks, Inc.
IT Infrastructure
12/11/2014
7.38
12.00
14.00
16.00
6.3
100.0
-54%
491.5
11.1x
7.3x
44.2
67.3
52%
59%
CYBR
CyberArk Software, Ltd.
IT Security
9/23/2014
51.86
13.00
15.00
16.00
5.4
85.8
224%
338.8
4.5x
3.7x
75.7
91.9
21%
86%
BABA
Alibaba Group Holding Limited
Internet
9/18/2014
99.62
60.00
66.00
68.00
320.1
21,767.2
47%
238,969.8
4.2x
17.9x
57,497.0
13,323.8
-77%
63%
MBLY
Mobileye N.V.
IT Infrastructure
7/31/2014
47.47
17.00
19.00
25.00
35.6
889.7
90%
5,127.7
42.3x
30.1x
121.2
170.4
41%
76%
GPRO
GoPro, Inc.
Consumer Electronics
6/25/2014
12.85
21.00
24.00
24.00
17.8
427.2
-46%
2,853.0
3.0x
2.1x
966.4
1,369.2
42%
42%
MOBL
MobileIron, Inc.
IT Security
6/11/2014
2.90
8.00
10.00
9.00
11.1
100.0
-68%
559.6
5.2x
4.6x
108.0
122.1
13%
79%
ANET
Arista Networks, Inc.
IT Infrastructure
6/5/2014
79.76
36.00
40.00
43.00
5.3
225.8
85%
2,506.4
6.0x
4.5x
417.1
558.9
34%
64%
TRUE
TrueCar, Inc.
Internet
5/15/2014
8.83
12.00
14.00
9.00
7.8
70.0
-2%
632.0
4.1x
3.1x
152.8
203.5
33%
90%
ZEN
Zendesk, Inc.
SaaS
5/14/2014
29.98
8.00
10.00
9.00
11.1
100.0
233%
536.8
6.5x
4.4x
83.2
121.1
45%
69%
PAYC
Paycom Software, Inc.
Software
4/14/2014
49.50
18.00
20.00
15.00
6.65
99.7
230%
752.6
6.4x
5.0x
117.0
150.5
29%
86%
FIVN
Five9, Inc.
SaaS
4/3/2014
14.16
9.00
11.00
7.00
10.0
70.0
102%
306.9
3.4x
2.8x
89.3
110.8
24%
57%
GRUB
GrubHub Inc.
Internet
4/3/2014
40.86
20.00
22.00
26.00
7.4
192.5
57%
1,895.8
11.2x
7.8x
170.0
244.3
44%
57%
TWOU
2U, Inc.
Software
3/27/2014
34.13
11.00
13.00
13.00
9.2
119.3
163%
502.8
6.0x
4.8x
83.1
105.4
27%
79%
Mean
17.75
29.6
1,049.5
53%
10,456.0
8.0x
6.2x
2,429.2
793.2
29%
67%
Median
15.00
7.7
107.9
55%
692.3
6.0x
4.5x
119.1
160.3
31%
66%
Source: CapIQ 9/22/16
Note: Offerings that raised/expected to raise less than
$40M and OTC–traded companies have been excluded
IT Security companies highlighted in gold
Ent. Value
EV/LTM
Company
High
Amount Raised
% Return
since IPO
Ticker
Low
IPO Price
Shares
Offered
(millions)
© 2016, Centaur Partners │Confidential │
23
Recent Technology Follow–on Offerings
(US$ in millions, except per share values)
As of Follow-On
Follow-On Date
Current
Price
Follow-On Price
Shares Offered
(millions)
Amount
Raised
% Return
since
Follow-On
EV/FTM
Rev.
LTM Rev.
FTM Rev.
% Rev.
Growth
MRQ
Gross
Margin %
Industry
Vantiv, Inc.
Payments
12/2/2015
$54.75
51.67
13.4
691.07
6%
12,497.21
4.1x
7.1x
3,041.39
1,771.33
-42%
53%
Fitbit Inc.
Consumer Electronics
11/12/2015
$13.77
29.00
17.0
493.00
-53%
5,517.38
3.6x
2.5x
1,516.61
2,211.86
46%
48%
Paycom Software, Inc.
Software
11/12/2015
$39.28
42.15
4.5
189.68
-7%
2,224.91
10.9x
8.1x
203.58
273.50
34%
86%
Sabre Corporation
Software
11/4/2015
$29.01
29.27
26.6
877.35
-1%
11,733.37
4.1x
3.6x
2,848.58
3,293.30
16%
35%
Paylocity Holding Corporation
Software
9/24/2015
$34.39
29.75
3.7
111.27
16%
1,452.18
9.5x
6.4x
152.70
227.01
49%
55%
Q2 Holdings, Inc.
Marketing
9/24/2015
$23.54
25.50
3.8
96.87
-8%
879.68
9.4x
6.6x
93.58
132.86
42%
46%
Benefitfocus, Inc.
Marketing
8/6/2015
$33.77
36.75
2.0
73.50
-8%
1,071.06
6.7x
5.5x
159.76
194.52
22%
42%
SS&C Technologies Holdings, Inc.
Semiconductors
6/18/2015
$58.60
61.50
10.5
645.75
-5%
5,325.09
6.8x
4.2x
787.79
1,269.59
61%
46%
TubeMogul, Inc.
Marketing
6/10/2015
$12.47
15.75
5.3
82.90
-21%
456.30
3.7x
2.8x
122.53
162.87
33%
67%
Zendesk, Inc.
Software
3/19/2015
$23.47
22.75
8.5
194.06
3%
1,672.50
13.2x
8.9x
127.05
188.59
48%
69%
HubSpot, Inc.
Marketing
3/17/2015
$44.30
37.00
4.1
152.24
20%
1,083.98
9.4x
6.7x
115.88
161.16
39%
74%
Imperva Inc.
IT Security
3/12/2015
$33.73
39.00
3.0
117.00
-14%
861.22
5.3x
4.3x
164.01
198.86
21%
81%
Endurance International Group Holdings, Inc.
Internet
3/6/2015
$8.70
19.00
12.0
228.00
-54%
4,017.11
6.4x
5.4x
629.85
746.03
18%
41%
GoPro, Inc.
Digital Media
11/19/2014
$8.88
75.00
10.4
777.04
-88%
9,353.18
8.3x
5.9x
1,121.74
1,586.11
41%
47%
Western Digital Corporation
Software
11/6/2014
$35.44
96.00
5.4
521.74
-63%
22,523.00
1.5x
1.5x
15,269.00
15,228.78
-0.3%
28%
Sensata Technologies Holding NV
Software
9/4/2014
$33.43
47.30
15.1
711.89
-29%
11,588.21
5.4x
4.8x
2,131.35
2,423.62
14%
34%
GrubHub Inc.
Internet/Food
9/3/2014
$25.38
40.25
10.5
421.34
-37%
3,002.46
14.8x
10.8x
203.10
277.79
37%
58%
Fabrinet
Internet
5/28/2014
$33.83
18.00
3.2
56.70
88%
420.00
0.6x
0.6x
677.70
720.92
6%
12%
NXP Semiconductors NV
Semiconductors
5/14/2014
$83.07
60.35
17.4
1,048.68
38%
19,057.72
3.8x
3.5x
4,976.00
5,502.40
11%
49%
Moneygram International Inc.
Software
3/27/2014
$5.84
16.50
8.0
132.00
-65%
1,870.09
1.3x
1.2x
1,474.40
1,500.47
2%
54%
SciQuest, Inc.
Software
3/26/2014
$13.09
26.75
3.0
80.25
-51%
551.20
6.1x
5.1x
90.23
107.40
19%
68%
Tableau Software, Inc.
Storage
3/20/2014
$48.35
89.25
4.0
357.00
-46%
5,068.01
21.8x
15.4x
232.44
328.79
41%
88%
Datawatch Corporation
Internet
2/12/2014
$5.22
28.50
1.8
50.02
-82%
196.27
6.1x
4.7x
32.28
41.73
29%
84%
Rocket Fuel Inc.
Software
1/30/2014
$2.63
61.00
5.0
305.00
-96%
2,016.49
8.4x
4.7x
240.61
433.10
80%
43%
Splunk, Inc.
Internet
1/22/2014
$46.60
81.00
6.0
486.00
-42%
8,031.78
30.0x
19.8x
267.94
405.82
51%
82%
Facebook, Inc.
Internet
12/20/2013
$119.81
55.05
70.0
3,853.50
118%
126,482.37
18.4x
11.2x
6,871.00
11,281.06
64%
85%
SPS Commerce, Inc.
Software
11/20/2013
$52.62
67.00
0.8
50.25
-21%
913.89
9.2x
7.6x
98.90
119.50
21%
69%
Demandware, Inc.
Networking
11/19/2013
$43.41
57.00
3.3
188.68
-24%
1,549.07
16.4x
12.2x
94.52
126.49
34%
71%
8x8 Inc.
Software
11/14/2013
$11.52
9.25
12.5
115.63
25%
528.80
4.6x
3.7x
114.29
141.75
24%
73%
ChannelAdvisor Corporation
Software
11/5/2013
$12.22
34.00
5.0
170.00
-64%
708.43
11.2x
8.9x
63.51
79.17
25%
80%
Yelp Inc.
Internet
10/30/2013
$25.32
67.00
3.8
251.25
-62%
4,439.85
21.8x
14.1x
203.49
313.94
54%
90%
Guidewire Software, Inc.
Software
10/22/2013
$55.86
48.75
7.8
378.48
15%
2,353.69
7.8x
6.7x
300.65
349.53
16%
57%
Mean:
44.28
9.6
434.63
-19%
8,420.20
9.1x
6.7x
1,388.33
1,618.74
30%
60%
Median:
39.63
5.3
211.03
-21%
2,120.70
7.3x
5.7x
218.01
321.36
31%
58%
Source: CapIQ 9/22/16
Note: Offerings that raised/expected to raise less than
$40M and OTC–traded companies have been excluded
IT Security companies highlighted in gold
Ent. Value
EV/LTM
Rev.
Company
© 2016, Centaur Partners │Confidential │
24
Contact Information
Centaur Partners
502 Waverley Street, Suite 301, Palo Alto, CA 94301
DAVID STASTNY
[email protected]
(650) 473-9280
NAISHADH JHA
(408) 802-7835
[email protected]
GLENN GOTTLIEB
[email protected]
(408) 506-1369
LESLIE DEPALO
[email protected]
(415) 235-1853
AL SISTO
Chicago Office
20 N. Clark Street
Suite 3350
Chicago, IL
60602
(312) 726-3600
New York Office
276 Fifth Avenue
Suite 604
New York, NY
10001
(212) 203-8449
Virginia Office
4870 Sadler Rd.
Suite 300
Glen Allen, VA
23060
(804) 205-5169
Irvine Office
2151 Michelson Dr.
Ste 120,
Irvine, CA
92612
(949) 679-4785
© 2016, Centaur Partners │Confidential │
25