Sumit Dhawan, CEO of Proofpoint, took the reins as head of the cybersecurity firm in 2022, a 12 months after it was acquired by Thoma Bravo for $12.3 billion. He is been pushing the agency to think about strategic alternatives akin to mergers and acquisitions of smaller cybersecurity gamers to spice up the corporate’s market enlargement and stimulate trade consolidation.
Proofpoint
LONDON — Privately-held cybersecurity agency Proofpoint is exploring tapping exterior buyers for pre-IPO financing and the consideration of mergers and acquisitions of smaller cyber corporations because it seeks a return to public markets in 2026, CEO Sumit Dhawan instructed CNBC.
“We’re taking a look at probably exploring public markets someday within the subsequent 12 to 18 months,” Dhawan, who took the reins as Proofpoint’s newly appointed chief in 2022, a 12 months after the corporate was acquired by private equity firm Thoma Bravo.
Dhawan added that the timing of Proofpoint’s IPO would nonetheless stay depending on basic market circumstances in addition to the end result of the 2024 U.S. presidential election.
Since Proofpoint’s 2021 buyout by Thoma Bravo and Dhawan’s subsequent appointment as CEO, firm administration has been pushing the agency to think about strategic alternatives akin to mergers and acquisitions of smaller cybersecurity companies to stimulate trade consolidation.
Noting that there are presently too many gamers within the cybersecurity market, Dhawan stated that Proofpoint is presently searching for acquisition targets that provide a “strategic match” for the corporate — for the correct worth.
“It is occurred in lots of different know-how areas — it occurred with infrastructure, it has occurred within the utility platform house — the place you begin constructing fewer suppliers however richer platforms and, in consequence, there will probably be consolidation,” Dhawan instructed CNBC in an unique interview this week.
“There are at this time limit, 2,000 or so non-profitable cybersecurity corporations which are venture-backed, so clearly they’re going to both get consolidated or probably not exist. As a result of there is no manner any market can have that many gamers. So it should occur, it is certain to occur.”
Dhawan stated he is discovering there is a little bit of a “bid-ask unfold” out there presently in the case of cybersecurity alternatives, that means goal corporations are asking for extra money on the sale worth than the valuations they’re being supplied. However he added that he is seeing some “nice alternatives” out there.
The highway from personal to public
Based in 2002 in Silicon Valley, Proofpoint makes know-how that helps corporations forestall phishing makes an attempt and different cyberattacks throughout a spread of platforms, together with e-mail, social media, cellular gadgets, and the cloud.
Proofpoint went public within the U.S. in 2012, however subsequently delisted after Thoma Bravo acquired the corporate in a $12.3 billion deal in 2021. The buyout got here after investor issues over a deceleration in income progress.
Now, Proofpoint is as soon as once more trying to faucet the general public markets.
“We’re slightly bit completely different from typical corporations going to IPO,” Dhawan stated. “They are usually smaller. They have an inclination to have a really completely different profile. They have an inclination to have uncertainty when it comes to profitability, and so they are likely to not be in place to simply consolidate.”
Taking Proofpoint public would not mark the primary time an organization Thoma Bravo acquired in a personal fairness buyout has executed an IPO for a second time. In 2019, cybersecurity agency Dynatrace, which Thoma Bravo took personal in a 2014 buyout, went public once more in a New York itemizing.
Proofpoint will undergo “a number of rounds” of financing to broaden possession of the corporate by different personal fairness buyers, Dhawan instructed CNBC, including that non-public placements — gross sales of shares to pre-selected buyers versus basic gross sales to the general public — are amongst choices it is contemplating.
“We’re near beginning the method” for fundraising from buyers past its personal fairness house owners, Dhawan stated. Nonetheless, he burdened the agency hasn’t formally set off this course of.
Proofpoint’s boss stated he hopes that what separates his firm from different tech and cybersecurity companies looking for an analogous IPO route, is an efficient steadiness of progress and profitability, double-digit progress, and robust management in its market.
