sasi it security market overview 3-15
TRANSCRIPT
SASI IT Security Market Overview
Dan Blank, Managing Director
W. 781 820-6245 [email protected]
© Copyright 2006 SASI, LLC. All rights reserved
S S IASTRATEGIC ADVISORY SERVICES INTERNATIONAL, LLC
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Outline
• IT Security Market Insights and Emerging Company Market Map
• 2014 M&A and Venture Funding Review
• 2015 M&A, Venture Funding & IPO Outlook
• SASI Overview
• Appendix: 2014 M&A Transactions
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Summary
2014 was an active year for the IT Security Market
Recently minted public companies gained traction in the market and in the
eyes of public investors
The M&A market was hot, with aggregate consideration of $4.8 billion
and a 40% increase in the number of transactions to 95 and a 30%
increase in median deal size to $32 million
The venture market maintained a very healthy pace with $1.5 billion of
aggregate financing and 135 rounds of funding
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IT Security Market Insights – Customer Trends
Information Security has emerged as regular front-page news • Customers of IT Security solutions have revisited the funding and the attention devoted to these
solutions in light of the enormous impact on their brand and the threat of significant financial
loss
50% of Corporate data traffic is outside the firewall• Applications continue to move to the cloud
• Mobile devices are a more prevalent access point to the enterprise
Hackers are gaining in sophistication and are better funded
Companies are coming to terms with the fact that they will be compromised, and thus,
are more focused on responding quickly to attacks
Prevention is becoming an area of increasing focus
Decision making dichotomy• Some customers have elevated cyber security to the board room, acting quickly in some cases,
with point solutions, while
• other customers are considering 4 to 5 year plans and approaching security architecture more
strategically
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IT Security Market Insights – Solution Providers
Identity and Access Management companies have become more critical with
increased adoption of Cloud applications and SaaS models
Mobile device management and application management solutions are in greater
demand
Emerging significant players such as Palo Alto Networks are gaining traction with
new solutions that are pulled along with existing core offerings
Security Solution Providers are expanding market focus from SMB and Telco into
the Enterprise
A number of new companies have grown to the point where they have been added to
our emerging company market map
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IT Security Emerging Company Market Map
Identity & Access Management AlertEnterpise Courion Fischer International Lieberman Software SailPoint/Thoma Bravo
Avatier CrossChx Forgerock Okta Stealthbits Tech
Beta Systems Dashlane FoxT (Parallax) Omada Trustev
Caradigm Deep Identity G2 Web Services OneLogin Xceedium
Centrify E-Trust Identity Forge Ping Identity Xyverify
Cloudlock Evidian Iovation Nexus/Portwise
Authentication Auth0 Deepnet Security ID.me Securenvoy Telesign
BioCatch Delta ID LaunchKey Semaphone
Bionym Digital Authentication Tech. NeXus SMS Passcode
BitGo Duo Security Pointsharp Socure
BlockScore HID Global SecureAuth SonavationApplication/Database Security Acunetix Contrast Security N-Stalker Quotium Veracode (in Reg)
Appthority DB Networks NTObjectives Rapid7 Virtual ForgeArxan Elliptic Technologies Portswigger Secure64 Software Vormetric Checkmarx Klocwork/Rogue Wave Pradeo Security Innovation Onapsis
Endpoint Protection Awareness Technologies Bromium HEAT (fka Lumension) Promisec ThreatTrack Security Bit Defender Confer Invincea/Sanboxie Quarri Technologies Webroot Bit9 CrowdStrike Malwarebytes SentinelOne Zscaler Blue Ridge Networks Cybereason Observable Networks Spikes security
Threat Intelligence and Area 1 Security BitSight Technologies eIQ networks Farsight Security Lookingglass CyberSecurity Intelligence and Analytics Ara Labs CrowdStrike Endgame iboss Norse
Bay Dynamics CyberFlow Analytics Easy Solutions Interset VidSys
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IT Security Emerging Company Market Map (cont.)
Network Access Control/Firewalls, Acess Layers Bradford Networks Impulse Point Ionic Security VidderGateways/Software Defined Perimeter Auconet ForeScout InfoExpress Lancope Mobile (MDM, MAM) AirPatrol/Sysorex Good Technology Lookout Optio Labs Wandera
AXON Ghost Sentinel Graphite Software Mojave Networks V-Key White SkyBeCrypt Hypori Nativeflow VictrioBluebox Security iboss NowSecure
Advanced Threat Detection/Protection Agari Cylance iboss Observable Networks Shadow Networksand APT Confer Cyphort Infocyte PhishLabs Trustlook
CounterTack Damballa Key Cybersecurity SeculertCyberSense eSentire Lastline
UTM Actiance Araxid Gateprotect Kerio OpenDNS Aker Security Solutions Clearswift GFI Software MyDigitalShield Untangle
Data Loss Prevention/ Governance Adallom Certes Networks GigaTrust Infrascale Red LambdaBitglass Code Green GTB Technologies Intelisecure VenafiCatbird Digital Guardian Infowatch Privacy Analytics Vera (docs)
Cloud Adallom Cloud Compare CloudLock Krimmeni Technologies Threat StackBitglass CloudLink Elastica Netskope Veradocs
Web Security and Gateways Distil Networks Edgewave iboss Shape Security Signal SciencesAnti-Fraud AdmitOne Easy Solutions Guardian Analytics Sift Science ThreatMetrix Incident Response Bit9 Rapid7 Resilient Sys (fka CO3 Systems)Other Endgame Integrata Security Security Scorecard ThreatConnect Wombat Security Tech.
Fortress Risk Mgmt PhishMe SourceClear ThreatStream ZeroFOX
HackerOne Pwnie Express Synack Stealth icebrg.io Menlo Security Protectwise
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IT Security Market Insights: IPO’s
The IPO window is narrow but the public equity markets remain strong and a number of security companies are
poised for an IPO
2014 IPO, CyberArk, nearly doubled on its debut, increased an additional third by the end of the year,
and doubled again in the first quarter of this year before trading down 20% in March (currently trading
at 15x Revenue)
Other 2014 IPOs struggled
• Imprivata was relatively flat initially but traded off and ended the year down 20% (3x EV/Rev)
• Varonis traded up strong initially but lost much of the gain in the fall before recovering the gain
at the end of the year (currently trading at 7x Rev)
• Mobile Iron traded down and ended the year off nearly 10% (currently trading at nearly 5x Rev)
The IPO Class of 2013 was flat to down in 2014
• Barracuda Networks traded down for much of the year before recovering at the end of the year
(trading currently at close to 8x Rev)
• Fire Eye ended off 30% despite doubling in the first quarter (trading currently at nearly 15x Rev)
The IPO class of 2012 fared better in 2014
• Palo Alto Networks doubled in 2014 and rose an additional 20% YTD (now trading at 16x Rev)
• Proofpoint increased 50% for the year despite a 30% drop in Q2 (now trading close to12x Rev)
• Qualys ended the year up 70% (currently trading close to 12x Rev)
• AVG traded up and down in a 20% band and ended up 18% (currently trading at 3x Rev)
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2014 IT Security M&A and
Venture Funding Review
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2014 M&A Summary
M&A Volume, transaction size and aggregate consideration continue to rise
Valuations for companies in which the transaction value was disclosed and the target revenue was
available reflect a valuation range of 2x to 50x revenue
• The Median Enterprise Value to Revenue was 5x
• Notable exceptions to this range include
o FireEye/Mandiant at nearly 10x
o And early stage targets which are estimated to have sold for 15x to 50x
Pulse Secure/Mobile Spaces – 50x
Proofpoint/NetCitadel – 24x
LANDesk/LetMobile – 15x
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2014 IT Security M&A Review
Source: The 451 Group, SASI Analysis
Select transactions for which the value was disclosed and revenue is available or estimated
Date
Announced
Buyer Seller Seller Description Ent. Value EV/ Rev
10/1/2014 Pulse Secure LLC MobileSpaces offers a BYOD policy-managed workspace that protects mobile enterprise apps and data against loss and leakage $100 50
5/20/2014 Proofpoint Inc. NetCitadel Inc. automated security incidence response $24 24
5/21/2014 LANDesk Software LetMobile gateway-based, device agnostic, security solutions for enterprise mobility. $15 15
1/2/2014 FireEye, Inc. MANDIANT Corporation incident response and computer forensics solutions and services. $989 10
8/25/2014 PS&C Limited Pure Hacking Pty. Ltd. Dedicated penetration testing services focusing on network application and Internet security $8 8
10/20/2014 Citrix Systems Inc. RightSignature LLC software-as-a-service that allows users to sign documents online $38 5
2/23/2014 Good Technology BoxTone Mobile Service Management $100 5
8/12/2014 Thoma Bravo LLC SailPoint Technologies integrates role management, access request management, and compliance management solutions $300 5
8/12/2014 Kaseya Intntl Scorpion Software Corp. offering integrated two factor authentication, single sign on and password management solutions $20 5
3/31/2014 Regenersis PLC Blancco Oy Ltd. data erasure and computer reuse solutions $83 5
12/9/2014 Belden Inc. Tripwire advanced threat, security and compliance solutions $710 5
9/3/2014 AVG Technologies Location Labs mobile safety and security subscription services sold in partnership with Verizon, AT&T, Sprint, T-Mobile, ... $140 4
7/21/2014 ACI Worldwide, Inc. Retail Decisions plc specialist payment fraud prevention provider $205 4
4/24/2014 GB Group PLC DecTech Solutions Pty Ltd fraud detection and prevention solutions across multiple languages, clients and geographies $18 4
9/2/2014 Veritas Capital BeyondTrust Software Inc. authorization management, access control and security solutions for virtualization and cloud environments $310 3
2/10/2014 Sophos Plc Cyberoam Technologies Unified Threat Management (UTM), next-generation firewall and network security $80 2
Median 5
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M&A Segmentation
Source: The 451 Group, SASI Analysis
Most active acquirers- # Companies acquired
Google- 4 AVG - 2 Cloudflare - 2 Palo Alto Networks - 2
Good Technology - 3 IBM - 2 Imperva - 2 Sophos - 2
Notable transactions segmented by technology focus
Identity and Access Management IBM/Crossideas Thoma Bravo/SailPoint HID Global/Lumidigm ASSA ABLOY/IdenTrust
IBM/Lighthouse Ping Identity/Accells Google/SlickLogin
SaaS Security CipherCloud/CloudUp Imperva/Sky Fence Intermedia/SaaSID (2013)
Incident Response FireEye/Mandiant Bit9/Carbon Black Palo Alto Networks/Morta Security
Proofpoint/NetCitadel
Mobile Vmware/Airwatch ($1.5B) Google/Divide ($120M) Blackberry/Secusmart Ping Identity/Accells
AVG/Location Labs ($140M) Pulse Secure/MobileSpaces ($100M) Digital Guardian/Armor5 LANDesk/LetMobile
Good Technology/Fixmo & Macheen & BoxTone Sophos/Mojave Networks
Notable transactions segmented by acquirer capital structure
Recent Public Companies FireEye/Mandiant Palo Alto Networks/Morta Security/Cyvera
Private Companies Bit9/Carbon Black Ping Identity/Accells CipherCloud/CloudUp Digital Guardian/Armor5
Bitsight Technologies/Anubis Networks Cloudflare/Gazzang & CryptoSeal CloudLock/Innovode
Private Equity Thoma Bravo/SailPoint LANDesk/LetMobile Veritas Capital/BeyondTrust Siris Capital/Pulse Secure
Established Pure Play Providers Sophos/Mojave Networks &
Cyberoam Technologies
Imperva/SkyFence & Tomium
Largest Transactions FireEye/Mandiant ($989M) Gemalto/Safenet ($890M) Belden/Tripwire ($710M)
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Most Active Acquirers (2010-2014)
Source: The 451 Group, SASI Analysis
# of
Txns Buyer Targets
10 Sentrigo, NitroSecurity, Inc. [fka Go2Market.com], LynuxWorks (ValidEdge
technology), Stonesoft Oyj, tenCube, InternetSafety.com, McAfee Inc [fka Network
Associates], Nordic Edge, Sensory Networks, PasswordBox, SyncDog
9 Applied Identity, Apere, RightSignature, Rohati Systems, Pari Networks, Virtuata,
Cognitive Security s.r.o., Sourcefire, ThreatGRID
7 Archer Technologies, NetWitness Corporation, Silicium Security, Silver Tail Systems,
Aveksa, PassBan Corp., Symplified Inc. (IP assets)
7 Widevine Technologies [fka Internet Direct Media, Inc.], zynamics [fka Sabre
Security], VirusTotal, Impermium, SlickLogin, Spider.io, Divide Mobile (fka Enterproid)
6 BitArmor Systems, Intellitactics, Breach Security, M86 Security, Application Security,
Inc. [aka AppSecInc], Cenzic
6Fixmo, Macheen, BoxTone, AppCentral, Copiun, Cloudsync
5 PrivacyChoice, Location Labs [fka WaveMarket Inc.], Norman Safeground AS [fka
Norman ASA] [FSN Partners], droidSecurity, Bsecure Technologies
5 Lumigent Technologies, Likewise Software (Active Directory Bridge business unit),
GentleSecurity Software S.A., eEye Digital Security, Blackbird Group
5 Valimo Wireless Oy, Todos AB, Data Security Systems Solutions Pte Ltd. [dba DS3],
Iron Stratus [aka IronStratus] [fka Conformity], SafeNet, Inc. [Vector Capital]
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Most Active Acquirers (2010-2014 cont.)
Source: The 451 Group, SASI Analysis
# of
Txns Buyer Targets
5 Gideon Technologies, PGP Corporation, GuardianEdge Technologies,
VeriSign Inc. (identity and authentication business), PasswordBank
Technologies
5 SonicWALL, Tripwire (acq by Belden 12-14), Crossbeam Systems, Blue Coat
Systems (seeking buyer), SailPoint Technologies
4
Mojave Networks, Cyberoam, DIALOGS, Astaro
4HiSoftware, ControlGuard LTD (business and assets), NETconsent, SE46 AB
4 Q1 Labs, Trusteer Inc., CrossIdeas s.r.l [fka Engiweb Security], Lighthouse
Security Group LLC (business operations)
4 SMobile Systems, Altor Networks, Mykonos Software, Webscreen Systems
4 Maildistiller, Abaca Technology, Armorize Technologies, NetCitadel
4 Volcker Informatik AG, e-DMZ Security, Symlabs, BiTKOO
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2014 Venture Funding Review
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2014 IT Security Venture Funding Review
Source: VentureSource, SASI Analysis
Venture funding remained strong with 136 companies raising close to $1.5B
The average financing was nearly $11M
The median financing was just short of $7M
Mobility is a common investment theme
Significant financings included 16 rounds exceeding $25M per round and accounted for
nearly half of the aggregate funding for the year ($697M)
• Transactions above $50M accounted for nearly 20% of the aggregate funding and
included:
o CipherCloud at $50M
o Okta at $75M
o Lookout at $150M
o Interestingly, all of these largest rounds included common investors such as
Andreesen Horowitz and two included Khosla and Greylock (Okta and
Lookout)
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2014 IT Security Venture Funding Review
Source: Venture Deal, SASI Analysis
Company Funding Date Amount Raised Company Funding Date Amount Raised
LaunchKey 12/18/2014 $3,000,000 Ping Identity 9/18/2014 $35,000,000
EdgeWave 12/18/2014 $2,000,000 Sentrix 9/18/2014 $6,000,000
OneLogin 12/16/2014 $25,000,000 Auth0 9/18/2014 $2,400,000
405Labs 12/12/2014 $2,329,998 eSentire 9/16/2014 $12,700,000
Threat Stack 12/11/2014 $5,000,000 Bastille Networks 9/15/2014 $1,500,000
Nok Nok Labs 12/10/2014 $8,250,000 Veracode 9/11/2014 $39,999,983
Area 1 Security 12/10/2014 $8,000,000 Authy 9/9/2014 $2,300,000
DB Networks 12/9/2014 $17,000,000 Trustlook 9/6/2014 $3,000,000
Icebrg.io 12/5/2014 $2,500,000 Delta ID 9/5/2014 $5,000,000
NexDefense 12/5/2014 $2,400,000 IntelliView Technologies 8/29/2014 $1,500,000
ThreatStream 12/4/2014 $22,000,000 Socure 8/27/2014 $4,297,485
NowSecure 12/2/2014 $12,500,000 Zumigo 8/25/2014 $6,000,000
CloudLock 11/24/2014 $6,700,000 MicroPower Technologies 8/21/2014 $2,000,000
ThreatConnect 11/21/2014 $4,000,000 Toopher 8/21/2014 $790,599
CipherCloud 11/20/2014 $50,000,000 vArmour Networks 8/20/2014 $36,000,000
Endgame 11/20/2014 $30,000,000 GuardiCore 8/19/2014 $11,000,000
Veradocs 11/19/2014 $14,000,000 Lookout 8/13/2014 $150,000,000
V-Key 11/19/2014 $12,000,000 Lastline 8/13/2014 $10,000,002
Menlo Security 11/19/2014 $10,500,000 Life360 8/7/2014 $25,000,000
Infocyte 11/14/2014 $500,000 Vectra Networks 8/6/2014 $25,000,000
Razberi 11/13/2014 $3,500,000 SecureAuth 8/5/2014 $5,710,450
Evident.io 11/11/2014 $9,850,000 CounterTack 7/25/2014 $5,000,000
Krimmeni Technologies 10/30/2014 $11,700,000 BEW Global 7/23/2014 $14,000,000
Co3 Systems 10/30/2014 $10,000,000 EdgeWave 7/23/2014 $11,000,000
Socure 10/28/2014 $2,500,000 Privacy Analytics 7/23/2014 $3,500,000
Argyle Data 10/27/2014 $4,500,000 Bay Dynamics 7/16/2014 $8,000,000
Fortress Risk Management 10/23/2014 $3,500,000 Malwarebytes 7/11/2014 $30,000,000
Spikes Security 10/22/2014 $11,000,000 Wombat Security Technologies 7/10/2014 $6,700,000
Nopsec 9/30/2014 $3,000,000 My Digital Shield 7/10/2014 $500,000
Bionym 9/25/2014 $14,000,000 Elastica 6/30/2014 $18,313,468
Agari 9/23/2014 $15,000,000 ProtectWise 6/30/2014 $14,060,000
Protenus 9/23/2014 $770,000 Illumio 6/30/2014 $7,999,999
Duo Security 9/22/2014 $12,000,000 Access Systems 6/30/2014 $4,000,000
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2014 IT Security Venture Funding Review (cont.)
Source: Venture Deal, SASI Analysis
Company Funding Date Amount Raised Company Funding Date Amount Raised
Threat Stack 6/30/2014 $2,671,000 Damballa 4/22/2014 $13,000,000
VidSys 6/30/2014 $349,000 Caspida 4/17/2014 $2,000,000
Axon Ghost Sentinel 6/30/2014 $25,000 Shadow Networks 4/11/2014 $1,500,000
Disrupt6 6/30/2014 $25,000 Certes Networks 4/9/2014 $1,680,000
BlockScore 6/27/2014 $2,000,000 Apprity 3/31/2014 $8,000,000
White Ops 6/25/2014 $7,000,000 LiveSafe 3/25/2014 $6,500,000
Well Checked Systems International6/24/2014 $1,400,000 Digital Guardian 3/19/2014 $12,000,000
ForgeRock 6/19/2014 $30,000,000 ID.me 3/17/2014 $10,000,000
Onapsis 6/18/2014 $9,580,000 Shadow Networks 3/13/2014 $10,199,301
BitGo 6/17/2014 $12,000,000 Niara 3/13/2014 $9,000,000
BioCatch 6/17/2014 $10,000,000 Optio Labs 3/7/2014 $10,000,000
Virtru 6/17/2014 $6,000,000 Pythian 3/6/2014 $6,000,000
Quantum Technology Sciences6/17/2014 $2,100,000 Caspida 3/5/2014 $9,524,995
CounterTack 6/16/2014 $5,000,000 Nok Nok Labs 2/27/2014 $16,500,000
SourceClear 6/12/2014 $1,500,000 CounterTack 2/27/2014 $3,000,000
Exabeam 6/11/2014 $10,000,000 CyberSense 2/26/2014 $5,000,000
Infrascale 6/6/2014 $16,300,000 Shape Security 2/25/2014 $40,000,000
HackerOne 5/30/2014 $9,000,000 CounterTack 2/25/2014 $3,000,000
Observable Networks 5/30/2014 $2,450,000 Cylance 2/21/2014 $20,000,000
RiskIQ 5/29/2014 $25,000,000 ThreatStream 2/21/2014 $4,000,000
Sonavation 5/22/2014 $18,569,153 Ionic Security 2/20/2014 $25,500,000
Signal Sciences 5/21/2014 $2,000,000 ioSafe 2/20/2014 $2,500,000
Sumo Logic 5/20/2014 $30,000,000 Elastica 2/19/2014 $6,300,000
Dashlane 5/20/2014 $22,000,000 CloudPassage 2/13/2014 $25,500,000
Life360 5/14/2014 $25,000,000 Cybereason 2/12/2014 $4,600,000
Sift Science 5/14/2014 $18,000,000 Ara Labs Security Solutions 2/10/2014 $500,000
Area 1 Security 5/6/2014 $2,500,000 Quantum Technology Sciences2/7/2014 $2,300,000
ZeroFOX 5/1/2014 $11,000,000 Uniken 1/27/2014 $4,900,000
Vorstack 5/1/2014 $5,200,000 SafeInstance 1/23/2014 $3,067,501
Red Lambda 5/1/2014 $200,000 Adallom 1/22/2014 $15,000,000
Vidder 4/30/2014 $4,798,660 Virtru 1/22/2014 $4,000,000
Signifyd 4/25/2014 $2,199,983 Bluebox Security 1/20/2014 $18,000,000
Sentinel Labs 4/24/2014 $12,000,000 Confer 1/16/2014 $8,000,000
Synack 4/24/2014 7,500,000$ Integrata Security 1/16/2014 $750,000
HackSurfer 4/23/2014 3,500,000$ NetClarity 1/8/2014 $260,000
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2015 IT Security M&A,
Venture Funding and IPO Outlook
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2015 IT Security M&A Outlook
Deal volume should increase as the number of venture-financed companies in the last few years has
outpaced the number of exits and private investors seek to take a bird-in-the hand approach to
seeking liquidity
Median price to revenue multiples are likely to remain healthy at 5x and particularly unique
solutions will command a significant premium to the median
Leading private company segments for M&A include the following:
• Mobile
• SaaS players
• Identity & access management
• Vulnerability assessment
• Incident response
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2015 Venture Funding and IPO Outlook
Venture Funding
• Venture should remain strong
• Later stage funding will continue, particularly if the IPO window remains narrow and companies
feel pressure to compete by spending greater amounts on sales and marketing
Private Equity
• PE firms are likely to remain active including:
o Thoma Bravo which has just agreed to sell BlueCoat to Bain for $2.4B, has taken SonicWall
private for $636M, sold Tripwire to Belden, acquired SailPoint, and through LANDesk,
acquired MobileSpaces
o Veritas Capital may seek to leverage its investment in BeyondTrust
o Apax would realize some liquidity from its public registration of Sophos
o Welsh Carson could register Alert Logic for an IPO
o Vista Equity is seeking a buyer for Websense ($890M 2013 acquisition), and is rumored to
be in discussions with Raytheon (which did not proceed with the BlueCoat acquisition)
o Clearlake Capital recently acquired FrontRange Solutions and combined with Lumension to
form HEAT Software
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2015 Venture Funding and IPO Outlook
Candidates for a 2015 IPO include:
• Good – $100M S-1 Registration last May
• Veracode – Filed S-1 at an IPO valuation rumored to exceed $1B
• LogRhythm
• Mimecast
• OneLogin
• SkyHigh
• Sophos – Apax Partners may be eyeing a valuation exceeding $1B on the LSE
• Vormetric
• Docusign
• Lookout
• Ping
• CloudFlare (2017 more likely)
• Alert Logic
• Bit9 - talk since 2012
• Rapid7- talk since 2012
• Digital Guardian (fka Verdasys) - talk since 2012
• CORE Security Technologies - talk since 2012
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SASI Overview
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Outline
• SASI Overview
• Market Expertise
• Strategic Buyer Relationships
• SASI Transactions
• Team Profiles
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SASI is a boutique M&A advisory firm focused on serving investors and entrepreneurs in the IT
industry.
We represent leading venture backed private companies who are exploring strategic M&A
options.
SASI Overview
M&A Process
Valuation Analysis
Industry Expertise:• Strategic Buyer Relationships
• Market & Competitive Trends
SASI Core Competencies
Strategic Planning
Market & Competitive
Research
Negotiation
With the following benefitsProvide an Integrated
Approach to Sellside M&A
Highest likelihood of creating a competitive bidding
situation with a successful outcome due to:
Targeting: SASI is able to quickly identify A list buyers,
avoiding wasted calls and meetings
Positioning: Each possible buyer has a unique set of
characteristics and reasons for acquiring the target. SASI
understands this and tailors the messaging to each buyer.
Negotiating: In depth knowledge of the buyers and the
industry positions SASI with insights that are critical to a
successful negotiation
Contacts: SASI knows the leading acquirers and has built
solid relationships over the last 18 years
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Information Technology(Semiconductors – Systems – Software - Software as a Service – Professional Services)
Market Expertise
IT Infrastructure
Networking
Technologies
Digital Networked
Home
Data Protection /
Storage
Cloud Computing
& Services
Wireless
Technologies
Aerospace &
Defense
IT Security
SASI
Expertise
Note: Core areas of expertise highlighted in blue
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Strategic Buyer Relationships
SASI is currently in discussions with or has worked with the following selected strategic buyers…
Industry Leaders
Networking/Security
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Semiconductor & Other
Strategic Buyer Relationships
Storage Industry
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Selected SASI Transactions
June 2010
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Selected SASI Transactions (cont.)
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Team ProfilesDan Blank, Managing DirectorDan has spent the better part of the last twenty years leading and advising emerging-growth technology
companies. As an investment banker with Adams, Harkness and Hill, Dan helped dozens of companies to
realize in excess of $1 billion in market value. A Group Leader in the Software and Internet Practice, Dan
steered client companies through buy-side and sell-side M&A transactions, IPOs, follow-on offerings, and
private placements. Dan was then recruited to lead the business development efforts for Mpower
Communications, a publicly traded telecommunications provider. Dan expanded his scope at Mpower to the
sales organization, where he played a leading role in restructuring the 500 person sales organization.
He redesigned training, compensation and performance analysis, thereby increasing revenue and margin
while reducing customer acquisition costs. Dan was then asked to spearhead the corporate development
efforts and was responsible for divesting three material business units. Dan was later recruited to Infinia
Corp., a Paul Allen-financed solar equipment manufacturer. Dan earned a B.A. in Economics from
Washington University in St. Louis and an MBA from Babson College.
John Rotchford, Managing DirectorPrior to founding Strategic Advisory Services International, LLC in May of 2005, John co-managed the information
technology practice area and opened the Southern California office for SVB Alliant, the former investment banking
division of Silicon Valley Bank. John is a 20+ year technology industry veteran with a unique blend of investment
banking, strategy consulting, corporate development and start-up experience. At Iomega, John was responsible for
strategic planning, M&A and new investment activities. Before Iomega, John handled public and private sell-side
transactions at Broadview International LLC and focused on enabling broadband technologies, digital networked
appliances, information security, semiconductors and storage systems. Prior to Broadview, John was director of
development at Compaq where he managed strategy projects covering broadband communications, the digital
networked home, Internet services, and corporate. At Compaq, he was also active in M&A including the Tandem
Computer and Digital Equipment Corporation mergers. John spent the first part of his career at an aerospace and
defense management consulting start-up that was acquired by Electronic Data Systems. John earned a B.S. in
Finance and Accounting from Babson College.
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Team Profiles
Christine Rotchford, Principal
Christine joined SASI in October, 2005 with over 13 years of market and competitive research experience
covering a broad range of IT areas such as information security, enterprise software and personal computing.
Prior to joining SASI, Christine was head of market research and competitive intelligence at Sonicwall, a
leading provider of security solutions to small and medium businesses. She also spent two years at Ensim, a
leading provider of hosting automation software. Prior to Ensim, Christine spent seven years in a variety of
market research roles. She spent two years at Compaq Computer Corporation in market intelligence with a
focus on competitive intelligence, market segmentation and sizing, and trend and database analysis. Christine
started her career at Management Ventures, a market research based consulting firm specializing in the
Consumer Packaged Goods Industry. She led all phases of primary and secondary research engagements at
Management Ventures. Christine has a B.S. in Finance from Babson College.
John Mascarenas, Senior Advisor
John’s career has covered a broad expanse of the high tech industry over the last 33+ years.
Currently John provides Strategic Advisory Services for equity, business development and mergers
& acquisitions to corporations such as Toshiba America Electronics Corporation, SanDisk as well
as startups. He was formerly with SanDisk Ventures as a Sr. Director/Consultant for strategic
equity and M&A as well as Sr. Investment Director with Intel Capital. John helps direct equity
and M&A activities in support of corporations’ strategic equity investment and acquisition
objectives. John's current market focus segments include both Enterprise and Consumer covering
Compute Storage, Data Management, Mobile, Flash, Networking. Previous sectors he has
directed investments in have included mobile & wireless, display technologies, MEMs, network
processing semiconductors, networking infrastructure, digital imaging, embedded
communications, software/hardware, handheld devices and software applications. John was with
Intel Corp since 1980 and with Intel Capital since 1998 where he was directly involved in over
70+ private equity and M&A transactions with a total value of $1B+. Prior to Intel Capital, he held
senior level positions at several Intel business units where his roles included strategic business
alliances, sales, marketing, product service and engineering.
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Team Profiles
Alex Barnes, Associate
Alex joined SASI in May, 2007 and has played a key role in BidStork’s sale to Sabre Holdings and Adaptec’s
divestiture of the Snap Server NAS business to Overland Storage. Alex also manages our 409A valuation
practice area. Prior to joining SASI, Alex interned at Yorkville Advisors, a private equity fund and leading
financier in the small-cap sector. His responsibilities consisted of researching potential portfolio companies
and providing transaction support. Prior to interning at Yorkville Advisors, Alex worked in operations
management at the San Diego Union Tribune. Alex holds a B.A. in Economics from the University of San
Diego.
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34
Appendix:
2014 M&A Transactions
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2014 IT Security M&A Transactions
Source: The 451 Group, SASI Analysis
Date Announced Buyer Seller Seller Description Ent. Value
($M)
EV/ Rev
12/9/2014 Belden Inc. Tripwire advanced threat, security and compliance solutions $710 4.8
12/1/2014 Intel Corporation PasswordBox identity manager that does not require one to type in, or even memorize passwords $55
11/24/2014 Acculynk PayPlum LLC (IP assets) safeguarding the acceptance and transport of sensitive payment card data within the online and mobile channels
11/24/2014 Datablink BRToken User Authentication
11/13/2014 Microsoft Aorato Directory Services Application Firewall (DAF™) by automatically learning, profiling and predicting entity behavior
11/6/2014 AVG Technologies Norman Safeground anti-virus, anti-spam, anti-spyware for consumers and SME vs Norman Shark (enterprise business) $14
10/31/2014 Garnero Group Acq. WISeKey SA information security and identity management software/services for the global growth of electronic transactions $120 44.5
10/28/2014 CA Technologies Identropy (SCUID assets) Identity Management initiatives.
10/28/2014 Cigital Inc. iViZ Security cloud-based penetration testing service for web applications
10/21/2014 BitSight Technologies AnubisNetworks key Security Email platforms
10/21/2014 Good Technology Macheen mobile cloud application service provider $8
10/20/2014 Citrix Systems Inc. RightSignature LLC software-as-a-service that allows users to sign documents online $38 5.4
10/16/2014 DocMagic, Inc. eSignSystems [Wave Systems) helping the enterprise manage their business processes and transactions entirely online $1
10/16/2014 Verdasys/Dig Guardian Armor5 secure mobile access to enterprise data and applications
10/7/2014 Sophos Plc Mojave Networks cloud-based approach to mobile security for enterprises that detects advanced threats and protects company data
10/1/2014 Pulse Secure LLC MobileSpaces offers a BYOD policy-managed workspace that protects mobile enterprise apps and data against loss and leakage $100 50.0
9/30/2014 GMO GlobalSign Inc. Ubisecure Solutions Inc. IAM Platform
9/15/2014 Tern plc Cryptosoft Ltd. Encryption for cloud and IoT applications
9/5/2014 Cryptzone AB HiSoftware Inc. offers a BYOD policy-managed workspace that protects mobile enterprise apps and data against loss and leakage
9/4/2014 LogMeIn Inc BBA Inc. [dba Meldium] make it simple and safe for companies and teams of all sizes to use modern web applications $11
9/3/2014 AVG Technologies Location Labs mobile safety and security subscription services sold in partnership with Verizon, AT&T, Sprint, T-Mobile, ... $140 4.2
9/2/2014 Kofax Limited Softpro GmbH electronic signature and signature verification software $31
9/2/2014 Veritas Capital BeyondTrust Software Inc. authorization management, access control and security solutions for virtualization and cloud environments $310 3.1
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2014 IT Security M&A Transactions (cont.)
Source: The 451 Group, SASI Analysis
Date Announced Buyer Seller Seller Description Ent. Value
($M)
EV/ Rev
8/29/2014 Morpho Dictao digital Security for on-line transactions
8/26/2014 Automattic Inc. Parka LLC [dba BruteProtect] Brute Force attack prevention plugin. We leverage the millions of WordPress sites to identify and block malicious Ips
8/25/2014 PS&C Limited Pure Hacking Pty. Ltd. Dedicated penetration testing services focusing on network application and Internet security $8 8.0
8/18/2014 YPB Group Ltd. Brand Reporter anti counterfeit application
8/15/2014 Yahoo! Inc. ClarityRay helps publishers and networks identify and prevent ad-fraud
8/12/2014 Kaseya Intntl Scorpion Software Corp. offering integrated two factor authentication, single sign on and password management solutions $20 5.0
8/12/2014 Thoma Bravo LLC SailPoint Technologies integrates role management, access request management, and compliance management solutions $300 5.0
8/11/2014 IBM Corporation Lighthouse Security Group Cloud Security services
8/8/2014 Gemalto NV SafeNet, Inc. [Vector Capital] security related tools including encryption technologies, hardware, software, and chips $890
8/7/2014 Facebook PrivateCore enables private computing in the cloud by validating and securing OpenStack servers
7/31/2014 IBM Corporation CrossIdeas s.r.l created IDEAS, Identity and Access Governance Solution
7/31/2014 Twitter Inc. Mitro Labs [fka Lectorius] Password security manager
7/29/2014 BlackBerry Ltd. Secusmart GmbH secure communications $82
7/21/2014 ACI Worldwide, Inc. Retail Decisions plc specialist payment fraud prevention provider $205 4.0
7/8/2014 RSA Security/EMC Symplified Inc. (IP assets) Identity-as-a-Service for the hybrid cloud
6/18/2014 CloudFlare Inc. CryptoSeal Virtual Private Networks (VPNs) as a service.
6/12/2014 CloudLock, Inc. Innovode Ltd. (assets) Cloud information security
6/11/2014 Insight Venture FireMon, LLC advanced network security management solutions for enterprises and managed service providers
6/3/2014 Cloudera Gazzang, Inc. help enterprises protect sensitive information and maintain performance in big data and cloud environments
5/27/2014 VASCO Data Security Risk IDS, Ltd. risk-based authentication solutions for global banking industry
5/22/2014 Thales Group SA Alcatel-Lucent (cyber assets) Network and telecommunications security solutions
5/21/2014 Cisco Systems Inc. ThreatGRID, Inc. dynamic malware analysis and threat intelligence technology, both on-premise and in the cloud, $55
5/21/2014 LANDesk Software LetMobile gateway-based, device agnostic, security solutions for enterprise mobility. $15 15.0
5/20/2014 Proofpoint Inc. NetCitadel Inc. threat management platform $24 24.0
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2014 IT Security M&A Transactions (cont.)
Source: The 451 Group, SASI Analysis
Date Announced Buyer Seller Seller Description Ent. Value
($M)
EV/ Rev
5/20/2014 Google Divide BYOD solution for corporate environments $120
5/15/2014 Hortonworks Inc. XA Secure comprehensive security and governance layer over big data infrastructure tools such as Hadoop $5
5/14/2014 Good Technology Fixmo (US/Sentinel assets) mobile risk management (MRM) $18
5/9/2014 General Electric Wurldtech protecting critical infrastructure from cyber attack
5/2/2014 NCC Group FortConsult A/S security testing services provider $3
5/1/2014 Clearlake Capital Lumension endpoint management and security platform
4/24/2014 GB Group PLC DecTech Solutions Pty Ltd fraud detection and prevention solutions across multiple languages, clients and geographies $18 3.6
4/23/2014 IntraLinks Holdings docTrackr Inc. documents safe and secure, wherever they're stored, whomever they're shared with $10
4/21/2014 Total Defense Inc Untangle, Inc. [fka Metavize] multi-function firewall and Internet management applications that are optimized for smaller organizations
4/7/2014 INSIDE Secure Metaforic protection against attack, for embedded, server and mobile security $12
3/31/2014 Regenersis PLC Blancco Oy Ltd. data erasure and computer reuse solutions $83 4.9
3/26/2014 Kudelski Group SA Conax AS content protection for digital TV services over broadcast, broadband and connected devices. $226
3/24/2014 Palo Alto Networks Cyvera Ltd. cyber-defense products that prevent remote attacks on Microsoft-based servers and end-points $191
3/21/2014 Ping Identity Corp accells technologies single service for authentication and identification on your mobile device
3/18/2014 Trustwave Holdings Cenzic, Inc. application security testing for enterprise software and tools to find application vulnerabilities
3/12/2014 Lockheed Martin Industrial Defender, Inc. cyber security solutions for control systems in oil and gas, utility and chemical industries
3/11/2014 IDMWORKS, Inc. IdentityForge, LLC identity and access management software solutions for mainframe, midrange, and legacy systems
2/24/2014 CloudFlare Inc. StopTheHacker, Inc. malware detection and web security.
2/23/2014 Good Technology BoxTone Mobile Service Management $100 5.1
2/21/2014 Google Inc. Spider.io anti-malware company for online advertisers
2/16/2014 Google Inc. SlickLogin simplest login experience for you using your smartphone
2/13/2014 Bit9, Inc. Carbon Black Computer security services provider
2/10/2014 HID Global Lumidigm biometric identity management solutions for point-of-sale (POS), civil ID and portable electronic device applications
2/10/2014 Sophos Plc Cyberoam Technologies Unified Threat Management (UTM), next-generation firewall and network security $80 2.3
2/6/2014 Imperva, Inc. Skyfence Networks Ltd. security and compliance of cloud applications $60
2/6/2014 Imperva, Inc. Tomium Software, LLC real-time mainframe security auditing agents (assets) $8
1/17/2014 ASSA ABLOY AB IdenTrust digital identity authentication solutions
1/17/2014 Vadium Technology Vadium Technology digital security and privacy solutions
1/15/2014 CipherCloud CloudUp Networks Security start-up that enables enterprises and government organizations to use SaaS services with confidence
1/15/2014 Google Inc. Impermium identifying fraudulent registrations, compromised logins, and risky transactions
1/6/2014 Palo Alto Networks Morta Security counter advanced cyber threats. $10
1/2/2014 FireEye, Inc. MANDIANT Corporation incident response and computer forensics solutions and services. $989 9.7