Acquisition of US cyber champion Imperva from Thoma Bravo

August 2, 2023

Thales to create world-leading cybersecurity company with acquisition of U.S. cyber champion Imperva from Thoma Bravo

Thales announced that it has reached an agreement with Thoma Bravo, a major software investment firm, to acquire 100 percent of Imperva, a leading U.S. data and application cybersecurity company, for an enterprise value of $3.6 billion.
The transaction is expected to close in early 2024, subject to customary antitrust and regulatory approvals.
Patrice Caine, Chairman and Chief Executive Officer, Thales, said, “The acquisition of Imperva represents an important milestone in Thales’ cybersecurity strategy. With this acquisition, we seize a unique opportunity to accelerate our cybersecurity capabilities and take an important step towards our goal of creating a world-class integrated global cybersecurity provider offering a comprehensive portfolio of products and services. We have great respect for Imperva’s innovative offerings in application and data security. Imperva and Thales share the same vision and DNA.

We are excited to embark on the next phase of our joint growth. We look forward to welcoming Imperva to Thales to further enhance our cybersecurity solutions and help our customers address their most critical digital security challenges.”
Pam Murphy, Chief Executive Officer, Imperva, said, “Today’s announcement represents an exciting new chapter for Imperva, one that advances our mission to help organizations protect data and all paths to it. It provides better protection and strategic value to our customers and partners, and creates more opportunities for our team members. We admire Thales’ vision and culture and believe that together we can deliver more product innovation and efficiencies through breakthrough solutions while helping to simplify the biggest security challenges facing businesses today: protecting digital identities, applications, APIs and data in every environment and every industry.”

Seth Boro, Managing Partner at Thoma Bravo, said, “Imperva is a leading force in cybersecurity with an impressive track record of delivering innovative security solutions and protecting customers at all stages of their digital transformation, from the application layer to the data layer.Over the course of our more than four-year partnership, Imperva has continued to differentiate itself in the competitive cybersecurity market through accelerated growth and innovation, as well as its unique approach to end-to-end application and data security. During this time, the company successfully completed three acquisitions that strengthened its product offerings and capabilities to better protect its customers’ critical data and applications.We are proud of what we have built through our partnership with Pam Murphy and the Imperva team, and look forward to watching the company’s continued success as part of Thales’ innovative and diverse security portfolio.”

Acquisition of a major application and data security provider.
With over half a billion dollars in revenue on a trailing twelve months (TTM) basis in 2022 and over 1,400 employees, Imperva is a leader in cybersecurity, protecting critical applications, APIs and data everywhere and at scale.With an integrated approach that combines edge, application and data security, Imperva protects enterprises at all stages of their digital journey.
This acquisition will add approximately $500 million in revenue to Thales and significantly expand its data and application security offerings. Combining the activities of Thales and Imperva will create a world-class global cybersecurity portfolio focused on three product areas:
Thales estimates that the merger will generate approximately $110 million in pre-tax synergies, including $50 million in cost synergies and $60 million in revenue synergies.

Thales’ move toward cybersecurity
Cybersecurity is a priority market for Thales.
It is both a key enabler for its other activities and a long-term fast-growing and technology-driven market to which Thales can bring unique expertise.As a global leader in cybersecurity, Thales is active at every level of the cyber value chain: Identify, Protect, Detect, Respond, Recover.
Thales’ offering is focused on three families of cybersecurity products and services:

  1. global security products around the CipherTrust Data Security platform, the SafeNet Trusted Access Identity & Access Management as a Service solution, and the broader cloud protection and licensing offerings. Imperva will be part of this business unit.
  2. government protection products, including encryption devices and sensors to protect critical information systems of governments and institutions.
  3. a comprehensive range of cybersecurity services around Cybel’s portfolio of solutions,including threat and risk assessment, training and simulation, detection and response, and integration projects.

As part of its strategy, Thales has significantly increased its focus on cybersecurity in recent years, expanding its presence and offering to reach critical mass. Following the Group’s recent bid for Tesserent and the completed acquisitions of S21sec & Excellium and OneWelcome, this new acquisition, subject to regulatory approvals, takes Thales’ cybersecurity business to the next level.
New enhanced profile for DIS In this growth context, and subject to upcoming social processes, Thales plans to combine all civil cyber activities (currently split between the Digital Identity & Security (DIS) and Defense & Security business segments) into DIS from January 1, 2024.This will further strengthen DIS’ position as a leading provider of civil cyber security products and solutions and facilitate the exploitation of synergies across the portfolio.

Pro forma, after the acquisitions of Imperva and Tesserent, global cybersecurity products and services will account for 44% of Thales’ Digital Identity & Security segment revenue in 2024, addressing a total addressable market of $36 billion, up 60% from the previous situation.
This acquisition enables the Group to set new financial targets for DIS. For the period from 2024 to 2027, DIS sales are expected to grow by 6% to 7% annually on an organic basis to reach a sales level of €5.4 billion to €5.5 billion in 2027. The EBIT margin is expected to reach 16.5% in the same period.
Value-creating transaction for shareholders
Given Imperva’s very attractive business model, the transaction will have an immediate positive impact on Thales’ growth and margin profile.
The acquisition price represents a 6.1x EV/sales multiple for 2024, which is in line with previous transactions and trading multiples of cybersecurity competitors with similar profitable financial profiles. It corresponds to an implied EBIT multiple of 17x 2024 after run-rate synergies and an EBIT multiple of 13x 2027 after run-rate synergies.

Following the transaction

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