Security Firm Checkmarx Getting New OwnerDeal Values the Company at $1.15 Billion
Checkmarx, an Israeli security company that has made its mark in DevOps and application security testing, soon will have a new owner. Private equity firm Insight Partners is selling the company to another private equity firm, Hellman & Friedman, in a $1.15 billion deal.
The deal marks a huge gain in value for the company over the last five years. Insight Partners invested $84 million in Checkmarx in 2015. Insight Partners will continue to own a "substantial minority interest" in the firm, it announced.
Checkmarx CEO Emmanuel Benzaquen and CTO and founder Maty Siman will remain with the company once the sale is complete. A spokesperson for Checkmarx says the deal will close "within the next few weeks."
Hellman & Friedman owns other security firms, such as SimpliSafe, which focus more on consumer security, but the deal for Checkmarx gives the firm entrance into the enterprise and corporate security markets.
The sale of Checkmarx comes at a time when the stock markets have been upended by the healthcare crisis stemming from the spread of COVID-19, which is having a significant effect on the global economy Uncertain Markets May Drive Cybersecurity Consolidation).
The Checkmarx deal, along with WatchGuard Technologies' acquisition of Panda Security earlier this month, show that merger and acquisition activity remains a priority for companies looking to build out their portfolios and offerings, says Joseph Krull, an analyst with Aite Group and a former CISO.
"My prediction is that we are going to see a lot of consolidation and exits (both good and bad) in the coming weeks," Krull tells Information Security Media Group.
Other observers, such as Hank Thomas, CEO of Strategic Cyber Ventures, a Washington-based venture capital firm, tell ISMG that the fluctuations in the stock market are likely to accelerate this consolidation trend. "The wave of consolidation that had already begun in cybersecurity is going to be accelerated by the events of the past week," he says.
Focus on App Security
Over the last 14 years, Checkmarx has made inroads by focusing on DevOps and application security as more companies have shifted to cloud-first strategies and launched digital transformation projects that require the rapid development, deployment and updating of apps to meet customer demand.
Checkmarx also has developed a bug-hunting and vulnerability research division to identity flaws in web and mobile applications. The company has 700 employees and about 1,400 customers, including SAP, Samsung and Salesforce, Coca Cola and the U.S. Army, according to company's website.
In February, Matt Rose, global director of strategy at Checkmarx, said in an interview with ISMG that many CISOs still prefer to look at application security through the lens of DevOps as opposed to adding in the extra "Sec" layer for security (see: Baking Security Into DevOps).
"It's interesting because a lot of CISOs still prefer 'DevOps' as the 'Sec' takes a different process of security," Rose says. "But security needs to be processed in a way that it is not cumbersome or intrusive."
Other Recent Deals
The cybersecurity market has seen other ownership changes in recent months as private equity firms look for new ways to build their portfolios.
In January, Insight Partners announced it would acquire internet of things security firm Armis in deal worth $1.1 billion (see: Insight Partners' Latest Purchase: IoT Security Firm Armis).
In October, private-equity firm Thoma Bravo, which has stakes in several cybersecurity companies, announced it would buy U.K.-based security company Sophos in a $3.9 billion deal (see: Thoma Bravo to Buy Sophos for $3.9 Billion).
Managing Editor Scott Ferguson contributed to this report.