Sumit Dhawan, CEO of Proofpoint, took the reins as head of the cybersecurity corporate in 2022, a occasion nearest it was once got via Thoma Bravo for $12.3 billion. He’s been pushing the company to believe strategic alternatives equivalent to mergers and acquisitions of smaller cybersecurity gamers to spice up the corporate’s marketplace enlargement and stimulate trade consolidation.
Proofpoint
LONDON — Privately-held cybersecurity company Proofpoint is exploring tapping exterior buyers for pre-IPO financing and the respect of mergers and acquisitions of smaller cyber corporations because it seeks a go back to crowd markets in 2026, CEO Sumit Dhawan instructed CNBC.
“We are looking at potentially exploring public markets sometime in the next 12 to 18 months,” Dhawan, who took the reins as Proofpoint’s newly appointed prominent in 2022, a occasion nearest the corporate was once got via personal fairness company Thoma Bravo.
Dhawan added that the timing of Proofpoint’s IPO would nonetheless stay depending on basic marketplace statuses in addition to the end result of the 2024 U.S. presidential election.
Since Proofpoint’s 2021 buyout via Thoma Bravo and Dhawan’s next appointment as CEO, corporate control has been pushing the company to believe strategic alternatives equivalent to mergers and acquisitions of smaller cybersecurity corporations to stimulate trade consolidation.
Noting that there are recently too many gamers within the cybersecurity marketplace, Dhawan mentioned that Proofpoint is recently in search of acquisition goals that deal a “strategic fit” for the corporate — for the suitable worth.
“It’s happened in many other technology spaces — it happened with infrastructure, it has happened in the application platform space — where you start building fewer providers but richer platforms and, as a result, there will be consolidation,” Dhawan instructed CNBC in an unique interview this pace.
“There are at this point in time, 2,000 or so non-profitable cybersecurity companies that are venture-backed, so clearly they’ll either get consolidated or potentially not exist. Because there’s no way any market can have that many players. So it’s going to happen, it’s bound to happen.”
Dhawan mentioned he’s discovering there’s somewhat of a “bid-ask spread” out there recently in relation to cybersecurity alternatives, which means goal corporations are requesting extra money on the sale worth than the valuations they’re being presented. However he added that he’s perceptible some “great opportunities” out there.
The street from personal to crowd
Based in 2002 in Silicon Valley, Proofpoint makes era that is helping corporations stop phishing makes an attempt and alternative cyberattacks throughout a space of platforms, together with e mail, social media, cell units, and the cloud.
Proofpoint went crowd within the U.S. in 2012, however therefore delisted nearest Thoma Bravo got the corporate in a $12.3 billion offer in 2021. The buyout got here nearest investor issues over a deceleration in income expansion.
Now, Proofpoint is as soon as once more having a look to faucet the crowd markets.
“We are a little bit different from typical companies going to IPO,” Dhawan mentioned. “They tend to be smaller. They tend to have a very different profile. They tend to have uncertainty in terms of profitability, and they tend to not be in position to easily consolidate.”
Taking Proofpoint crowd wouldn’t mark the primary date an organization Thoma Bravo got in a personal fairness buyout has performed an IPO for a 2d date. In 2019, cybersecurity company Dynatrace, which Thoma Bravo took personal in a 2014 buyout, went crowd once more in a Pristine York checklist.
Proofpoint will travel thru “multiple rounds” of financing to enlarge possession of the corporate via alternative personal fairness buyers, Dhawan instructed CNBC, including that personal placements — gross sales of stocks to pre-selected buyers versus basic gross sales to the crowd — are amongst choices it’s making an allowance for.
“We’re close to starting the process” for fundraising from buyers past its personal fairness homeowners, Dhawan mentioned. Then again, he wired the company hasn’t formally spark off this procedure.
Proofpoint’s boss mentioned he hopes that what separates his corporate from alternative tech and cybersecurity corporations in search of a indistinguishable IPO direction, is a great stability of expansion and profitability, double-digit expansion, and robust management in its marketplace.
