Cyber security firm Imperva (NYSE: IMPV), founded in 2002 by a team of Israelis including Shlomo Kramer, who co-founded network security firm Check Point Software Technologies and is the founder and CEO of Cato Networks, is said to be seeking an exit strategy after coming under pressure from activist hedge fund Elliott Management, Reuters reported.
Imperva’s stock closed at $44.76 on July 8 and rose after hours. It has a market capitalization of $1.44 billion. In November 2011, with Kramer as its CEO, Imperva made its IPO at $18 per share raising $90 million, at a company valuation of roughly $400 million.
Last month Imperva stock jumped after billionaire Paul Singer‘s Elliott Associates revealed a 9.8% stake in the company, in a June 20 SEC filing, in a bid to unlock value.
Elliott urged the company to seek “strategic and operational opportunities,” saying Imperva stock is “materially undervalued,” given that the company “operates in a highly strategic area of the technology industry with an attractive competitive position and a compelling product set in both the web-application firewall (WAF) and database activity monitoring markets.”
Elliott has been actively acquiring large stakes in cyber security and other software companies, including Blue Coat, the #1 market share leader in web security, which Symantec (NASDAQ: SYMC) agreed to acquire for $4.65 billion last month. Elliot had also bought a large stake in Qlik Technologies (NASDAQ: QLIK)(QLIK), a visual analytics company, which private equity firm Thoma Bravo LLC agreed to acquire for $3 billion in early June.
Imperva, which competes with IBM Corp, F5 Networks and Akamai Technologies, might be joining the recent wave of consolidation in the cyber security market.
Last week, leading antivirus software company Avast Software, backed by global private equity firm CVC Capital Partners, agreed to acquire rival AVG Technologies NV (NYSE: AVG) for $1.3 billion.
Two weeks ago, Intel Corp. (NASDAQ: INTC) was said to be seeking an exit strategy for Intel Security, the antivirus software maker formerly known as McAfee, which Intel acquired for nearly $7.7 billion in February 2011.
In January, Milipitas, Calif.-based cybersecurity firm FireEye, Inc. (NASDAQ: FEYE) acquired privately held global threat intelligence leader iSight Partners for $200 million.
Imperva is a leading provider of cyber security solutions that protect business critical data and applications in the cloud and on-premises. The company’s SecureSphere, CounterBreach, Incapsula and Skyfence product lines enable enterprises to discover assets and risks, protect valuable information – such as intellectual property, business plans, trade secrets, customer and employee information, and the day-to-day data that drives your business – and comply with the myriad of increasingly stringent data protection regulations and mandates, as well as enforce policies, entitlements and audit controls.
The Imperva Defense Center, a research team comprised of some of the world’s leading experts in data and application security, continually enhances Imperva products with up-to-the minute threat intelligence, and publishes reports that provide insight and guidance on the latest threats and how to mitigate them. Imperva is headquartered in Redwood Shores, California. The company generated revenue of $234 million in 2015, with over 4,500 customers and 300 partners in more than 90 countries worldwide.
Shlomo Kramer owned about a tenth of Imperva as of December 31. In 2014, Imperva acquired Israeli cloud-based security firms Skyfence and Incapsula in which Kramer had a stake. In addition to co-founding and leading Imperva, Cato Networks and Check Point Software, Kramer is a board member and founding investor in a number of security, fintech and software companies, including Exabeam, FundBox, Indegy, Sumo Logic, Insert Mobile, LightCyber and Gong. His previous investments include Secure Islands (MSFT), WatchDox (BBRY), Lacoon (CHKP), Hyperwise (CHKP), SkyFence (IMPV), Palo Alto Networks (PANW), Trusteer (IBM), Worklight (IBM), Business Layers (CA) and Digital Fuel (VMware). He is a former IDF captain, and graduated with an MSc from Hebrew University and a BSc from Tel Aviv University.
Photo: Shlomo Kramer, Founder & CEO at Cato Networks, Co-Founder of Imperva and Check Point Software.