A tale of two public companies

Infosec companies don’t always get the love they deserve from the markets once they IPO. As Barracuda Networks discovered despite posting respectable profitable growth.

PE firm Thoma Bravo stepped in, paying $27.55 per share for Barracuda in a $1.6bn move taking it private.

The market can be unforgiving, even when a company like Barracuda is profitable, it may not be profitable ‘enough’. One of the main contributing factors in the slower growth was Barracuda’s shift to a more cloud-focussed business model.

While the transition from legacy on-premises billing models to a subscription-based cloud model makes sense in the long run, it does include a degree of disruption – particularly on how the financial numbers are reported.

From that perspective, the deal makes a lot of sense. Thoma Bravo acquires a company that the market isn’t fully in-love with. Helps it get through the transition period to a cloud-based model, and see the value shoot up.

On the other end of public infosec companies lies Proofpoint. A company that has continued to grow through acquisition buying companies like FireLayers, Cloudmark, and most recently Weblife.io.

Weblife is a browser isolation provider and makes an almost perfect fit for a company like Proofpoint which has a broad array of security capabilities but had a blind spot around BYOD or personal use of company-issued devices. Weblife provides an answer that may appease many an enterprise wrestling with personal / corporate monitoring and segregation.

The $60m acquisition of Weblife falls within the average purchase price for Proofpoint. Founded in 2013, Weblife had raised $3.5m, so the deal resulted in just over 17x multiple of invested capital.