cybersecurity monthly snapshot | january 2016
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Cybersecurity Monthly Snapshot.
January 2016
Advisors & Dealmakers In Cybersecurity.
Momentum Partners, LLC • Advise. Network. Invest.
January Deal Flow Venture Capital & Private Equity Investment Remained Strong, While M&A Had A Slow Start To The Year.
Note: Bold denotes lead investors. Source: Capital IQ, Crunchbase.
Date Target Acquirer Sub-Sector EV ($M) EV / Rev
1/25/16 IAM Security
Services NA NA
1/20/16 Threat Intelligence 275.0 6.9x
1/15/16 Payment Fraud
Prevention NA NA
1/14/16 Email Security NA NA
1/13/16 Web Security NA NA
1/12/16 HALBERD GROUP Forensics & Infosec
Services NA NA
1/06/16 IoT Network
Security NA NA
1/05/16 Automotive
Cybersecurity NA NA
Cybersecurity M&A Cybersecurity Investing (VC & PE)
Date Company Investors Funding
Stage Amount
($M)
1/28/16 Google Capital, IVP, Felicis Ventures, A16z, Citi Ventures, GV Series C $75.0
1/27/16 Bessemer Venture Partners, HV Holtzbrinck, Project A Ventures NA NA
1/27/16 NA Seed $3.0
1/28/16 StageOne Ventures Series A N/A
1/26/16 Lightspeed, Norwest, SingTel Innov8, M. Boodaei, R. Loonkar Series A $20.0
1/25/16 CE Ventures, Pitango Venture Capital, iVentures Asia Series A $4.0
1/21/16 Fidelity Investments Series B $50.0
1/21/16 Wellington Management Series G $76.0
1/20/16 NA Venture $7.5
1/20/16 Global Emerging Markets Limited Share Sub. Facility $59.8
1/19/16 RDSeed Seed $1.5
1/19/16 Arrowroot Capital, J. Reddy, V. Bisani Series C $9.6
1/18/16 NA NA $2.2
1/13/16 Filsa Capital, Newion Investments, PPM Oost Series B N/A
1/13/16 Venrock, Northern Light Venture, Norwest Venture, KPCB Series D $25.0
1/13/16 Spring Mountain Capital, Fulcrum Equity Partners Series B $8.0
1/13/16 TA Associates PE $187.0
1/13/16 U.S. Venture Partners, 83North, Battery, ClalTech, Harmony Partners, RTP Series E $50.0
1/08/16 Sandbox Advantage Fund, BlueCross BlueShield Venture Partners Series A $5.0
1/04/16 Shlomo Kramer, Mickey Boodaei, Rakesh Loonkar, Zohar Zisapel Series A $7.0
By The Numbers
Email Security Biz
§ M&A Transactions: 8 transactions with total disclosed deal value of $275 million
§ Capital Raises: 20 transactions with total disclosed amount raised of $591 million
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Deal Profile: FireEye Acquires iSight Partners A Ground Breaking Transaction Creating A Formidable Combined Threat Intelligence Platform.
Transaction Overview iSight Partners Overview
§ Combination creates most advanced and comprehensive cyber threat intelligence operation, driving industry toward intelligence-led approach to cybersecurity
§ “Until now, only governments and large enterprises have been able to achieve intelligence-led security, but with the combined resources of FireEye, Mandiant and iSIGHT, we can make the benefits of intelligence-led security available to a broad range of organizations.” - John Watters
Rationale
Acquires
Threat Intelligence
Date: EV / LTM Rev: EV / LTM EBITDA: Total Raised:
HQ: Dallas, TX
CEO/Founder/Chairman: John Watters
$275 Million[1]
Investors: Bessemer, Blackstone Group
Founded: 2006
Threat Intelligence Platform “Actionable Intelligence”���
���
ThreatScape Cloud
MySight Portal
APIs / SDKs
ThreatScape Subscriptions
Intelligence���Streams
Research & Reports
Dedicated���Support
350+ Experts 17 Countries 29 Languages 1 Mission
Robust Technology Partner Ecosystem
Source: Company press releases and websites. [1] Includes $200 million in cash upfront plus $75 million in earn-out value (50 / 50 cash and stock).
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1/20/16
6.9x
NA
$46.3M
Stock Price Performance Public Markets Took A Toll In January, Cybersecurity Included.
Note: Market data as of January 29, 2016. Source: Capital IQ.
Company Price Change (%) Company Price Change (%)
$18.87 6% $3.69 2%
$10.58 43% $149.49 15%
$78.81 3% $50.36 23%
$43.58 3% $25.99 21%
$14.09 32% $13.10 13%
$28.14 10% $3.41 12%
$2.73 3% $46.29 21%
$51.56 19% $19.84 6%
$11.65 3% $41.44 1%
$7.59 21% $15.50 7%
January Stock Price Performance
80 90
100 110 120 130 140 150 160
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
LTM Indexed Stock Performance
-12% -12% -4%
-1% -1%
75
80
85
90
95
100
105
12/31 1/4 1/8 1/12 1/16 1/20 1/24 1/28
January Indexed Stock Performance
-5%
-13%
-5%
-17%
-8%
High Growth Security
Low Growth Security
S&P 500
NASDAQ
HACK
Index
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Earnings Scorecard Earnings Release Calendar And Results.
2/24/16 4:30 PM ET
212-444-0895 8441877
80.27 | 80.09
Cons. | Act.
0.08 | 0.07 EPS:
1,629 | 1,630
Cons. | Act.
4.13 | 4.17 EPS:
2/11/16 4:30 PM ET
844-237-3590 22614775
2/11/16 5:00 PM ET
877-312-5521 NA
1,009 | 1,009
Cons. | Act.
0.51 | 0.51 EPS:
2/5/16 7:30 AM ET
35-897-511-0100 387938
2/8/16 4:30 PM ET
877-881-2609 22358876
2/10/16 5:00 PM ET
800-658-7107 NA
2/4/16 4:30 PM ET
855-327-6837 NA
2/8/16 5:00 PM ET
844-815-2878 29979833
2/16/16 5:30 PM ET
877-407-8037 NA
2/3/16 5:00 PM ET
877-718-5104 9284463
264 | 265
Cons. | Act.
(0.35) | (0.35) EPS:
Rev:
2/25/16 4:30 PM ET
877-681-3374 6229459
2/25/16 4:30 PM ET
866-501-1535���NA
2/4/16 5:00 PM ET
http://bit.ly/1X1Fs6q
2/18/16 2:00 AM ET
NA NA
2/16/16 4:30 PM ET
800-676-3079 NA
2/9/16 3:30 AM ET
44-2071-92-8000 35154223
FY15 3Q16
Rev:
FY15
Rev:
FY15 FY15 FY15
Rev:
FY15
FY15 FY15 FY15 3Q16 2Q16 FY15 FY15
FY15 3Q16 FY16 3Q16 FY15 FY15
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IPO Pipeline
Public Company Trading Analysis High Growth & Low Growth Public Security Comps.
Note: NM – Not Meaningful, NA – Not Available; as of January 29, 2016; * performance since IPO. Source: Capital IQ.
Company Name Stock Price LTM Price
Performance Market Cap
($M) Enterprise Value
($M) 2014-15E
Revenue Growth 2015E-16E
Revenue Growth
EV / Revenue EV / EBITDA P / E
LTM CY2015 CY2016 LTM CY2015 CY2016 CY2016
High Growth Security (>20% CAGR) Palo Alto Networks 149.49 15.6% 12,843 12,574 53.4% 35.2% 12.2x 11.1x 8.2x 72.5x 60.4x 33.0x 66.8x
Splunk 46.29 (13.8%) 6,004 5,055 44.5% 31.3% 8.5x 7.8x 5.9x NM NM NM NM
Fortinet 28.14 (3.7%) 4,848 3,956 31.0% 24.2% 3.9x 3.9x 3.2x 23.5x 23.5x 17.9x 41.4x
FireEye 14.09 (57.0%) 2,262 1,790 46.5% 31.0% 3.1x 2.9x 2.2x NM NM NM NM
Proofpoint 50.36 0.5% 2,057 1,996 35.7% 31.2% 7.5x 7.5x 5.7x NM NM NM NM
Imperva 51.56 20.3% 1,620 1,367 40.0% 26.4% 6.4x 6.0x 4.7x NM NM NM NM
CyberArk 43.58 29.0% 1,380 1,130 48.8% 32.2% 7.8x 7.4x 5.6x 28.8x 29.1x 24.7x 46.7x
Qualys 25.99 (33.5%) 889 715 23.1% 22.8% 4.6x 4.3x 3.5x 14.0x 13.2x 11.0x 32.0x
Rapid7* 13.10 (18.1%) 545 421 39.9% 28.5% 4.2x 3.9x 3.0x NM NM NM NM
Imprivata 11.65 (17.2%) 291 240 21.8% 20.1% 2.1x 2.0x 1.7x NM NM NM NM
Mean 38.5% 28.3% 6.0x 5.7x 4.4x 34.7x 31.6x 21.6x 46.7x Median 40.0% 29.8% 5.5x 5.1x 4.1x 26.1x 26.3x 21.3x 44.1x
Low Growth Security (<20% CAGR) Check Point Software 78.81 0.4% 14,253 12,969 9.0% 8.0% 8.0x 8.0x 7.4x 13.8x 13.8x 13.2x 17.4x
Symantec 19.84 (22.5%) 13,402 11,785 (17.9%) (33.3%) 1.9x 2.2x 3.2x 6.0x 6.7x 8.9x 18.2x
Trend Micro 41.44 47.7% 5,657 4,628 7.4% 16.6% 4.5x 4.5x 3.9x 13.3x 13.6x 11.9x 29.8x
Sophos* 3.41 (3.6%) 1,540 1,756 NA NA 3.8x NA 3.5x 29.4x NA 22.6x 45.5x
AVG Technologies 18.87 (4.9%) 988 1,109 14.1% 4.4% 2.6x 2.6x 2.5x 7.5x 7.2x 7.0x 9.9x
VDSI 15.50 (31.5%) 614 430 19.0% (4.7%) 1.7x 1.8x 1.9x 6.7x 7.2x 9.0x 13.7x
Barracuda Networks 10.58 (69.7%) 562 412 16.2% 9.6% 1.3x 1.3x 1.2x 6.4x 6.4x 7.4x 27.1x
F-Secure 2.73 5.3% 425 338 (14.4%) 6.0% 1.9x 2.1x 2.0x 10.6x 10.9x 10.6x 22.0x
Mimecast* 7.59 (24.1%) 410 445 NA 18.3% 3.5x 3.3x 2.8x 20.5x 28.2x 49.5x NM
MobileIron 3.69 (58.4%) 296 198 10.8% 16.4% 1.4x 1.4x 1.2x NM NM NM NM
Mean 5.5% 4.6% 3.1x 3.0x 3.0x 12.7x 11.8x 15.6x 23.0x Median 9.9% 8.0% 2.3x 2.2x 2.6x 10.6x 9.1x 10.6x 20.1x
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Strategic Financing
Momentum Partners Overview Advisors & Dealmakers In Cybersecurity.
Why Momentum Partners?
We are a bespoke, next-generation advisory + networking + investment firm designed to serve and evolve with the
Entrepreneur’s company – Series A to exit.
Cybersecurity � Enterprise IT � Cloud & SaaS � Mobile������
Mergers & Acquisitions* � Capital Raising*������
Corporate Development � Ecosystem Development
Momentum’s Cybersecurity Team Michael Tedesco Executive Chairman Founder Strategic and Capital Markets Advisor to CEOs, Founders & Boards
Eric McAlpine Managing Partner Founder Senior Advisor Cybersecurity Lead
Dino Boukouris Director Strategic Advisor Start-up Advisor VC & Private Equity
Keith Skirbe Director Strategic Advisor Mergers & Acquisitions Deep Cybersecurity Expertise
Dealmakers in Security & Enterprise IT CLIENT COUNTERPARTY CLIENT COUNTERPARTY CLIENT COUNTERPARTY CLIENT COUNTERPARTY CLIENT COUNTERPARTY
150+ Deals $150+ Billion
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CYBERscape: The Cybersecurity Landscape The Security Sector Is Dynamic And Vast. We Are Ceaseless & Vigilant In Our Coverage.
Infrastructure Security Endpoint Security Application Security
Endpoint Protection & Anti-Virus WAF & Application Security
Vulnerability Assessment Intrusion Prevention Systems
Unified Threat Management
Network Firewall Network Monitoring
Source: Momentum Partners.
Identity & Access Management
Threat Intelligence Mobile Security
Endpoint Detection & Response
IoT Security
Transaction Security
Web Security Messaging Security
Specialized Threat Analysis & Protection
Cloud Security
SIEM
Security Incident Response
Security Operations & Incident Response
Risk & Compliance
Data Security
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Advise. Network. Invest. Momentum Partners, LLC
340 Brannan Street | Suite 501
San Francisco, California 94107
Michael Tedesco Executive Chairman
Eric McAlpine Managing Partner
Keith Skirbe Director
Dino Boukouris Director
*Securities offered through Financial Telesis Inc. Member FINRA/SIPC.