A major private equity player just acquired the publicly traded Imperva for $2.1 billion - and there could be more acquisitions like it to come
- Imperva, a publicly-traded cybersecurity company, announced a deal on Wednesday to be taken private by the private equity firm Thoma Bravo.
- The deal values Imperva around $2.1 billion, a 28% premium on where the stock price closed on Tuesday.
- The acquisition is aligned with consolidation trends in cybersecurity, according to analyst Joel Fishbein, and there could be more to come.
Imperva's stock soared nearly 30% on Wednesday - despite a major market sell off - following its announcement that the private equity firm Thoma Bravo has agreed to acquire the company for $55.75 a share, a 28% premium on its closing price Tuesday.
The deal values Imperva at around $2.1 billion.
Imperva, a cybersecurity software company, has 45 days to "go-shop," which means its board could opt to sell to a higher bidder, if one comes to the table. Barring another offer, Thoma Bravo's acquisition will close in late 2018 or early 2019.
Thoma Bravo is a major private equity player in the software space, and has doubled down on the cybersecurity space more recently.
Its portfolio includes Barracuda Networks, which was acquired in February for $1.6 billion, as well as Centrify, Digicert, LogRhythm and McAfee. It's also invested in SailPoint, which is publicly traded.
The price is low, but don't expect a better offer
At $2.1 billion, Thoma Bravo will acquire Imperva at a revenue multiple of 4.6x - which is relatively low for the software space, where many companies trade at double digit revenue multiples.
But at least one analyst is skeptical that Imperva will see a better offer.
"Imperva's take-out valuation remains a discount to our security coverage, but we see it unlikely that a superior proposal will emerge in the 45-day 'go-shop'," wrote Joel Fishbein, an analyst with BTIG.
"While not at nosebleed Duo Security takeout levels," Fishbein wrote, "we believe investors should be pleased with Imperva's takeout valuation of $2.1 billion," referencing Cisco's acquisition of Duo Security for $2.35 billion in August, at a 15x revenue multiple.
And this won't be the last of the cybersecurity acquisitions, Fishbein said.
"We expect vendor lists to continue to consolidate as [chief information security officers] move spend from less effective providers to best-in-breeds," he wrote. "Many security providers will need to act quickly and get creative to stay competitive in such an environment."