Proofpoint CEO Sumit Dhawan took over as head of the cybersecurity company in 2022, a year after Proofpoint was acquired by Thoma Bravo for $12.3 billion. He is urging the company to consider strategic opportunities, such as mergers and acquisitions of smaller cybersecurity companies, to accelerate the company’s market expansion and promote industry consolidation.
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LONDON — Privately held cybersecurity company Proofpoint is considering using external investors to raise pre-IPO capital and considering mergers and acquisitions with smaller cyber companies as it aims to return to public markets in 2026. CEO Sumit Dhawan told CNBC.
“We are looking at the possibility of exploring the public markets in the next 12 to 18 months,” Dhawan said, adding that Proofpoint plans to launch a new Proof in 2022, a year after it was acquired by private equity firm Thoma Bravo. I was appointed as the point manager.
Dhawan added that the timing of Proofpoint’s IPO remains dependent on general market conditions and the outcome of the 2024 US presidential election.
Since Proofpoint was acquired by Thomas Bravo in 2021 and Dhawan was subsequently appointed CEO, the company’s management has made strategic moves, including mergers and acquisitions of smaller cybersecurity companies, to foster industry consolidation. It has asked the company to consider the opportunity.
Noting that there are currently too many players in the cybersecurity market, Dhawan said Proofpoint is a “strategic fit” for the company and is looking for an acquisition at the right price.
“The same thing is happening in many other technology areas. It’s happening in infrastructure, it’s happening in the application platform space, where we start to reduce the number of providers and build richer platforms, and as a result , there will be consolidation,” Dhawan said exclusively on CNBC. This week’s interview.
“Right now, there are about 2,000 unprofitable cybersecurity companies that are venture-backed. So it’s clear that those companies will either consolidate or may not exist, because in any market. There’s no way there’s going to be that many players. So it’s going to happen, it’s going to happen.”
Dhawan said he has noticed that there is currently a bit of a “bid price spread” in the market when it comes to cybersecurity opportunities, where the target company commands more capital at the sale price than the offered valuation. He said that it means that But he added that he sees some “huge opportunities” in the market.
Dhawan said geographic expansion is a key priority for Proofpoint as it seeks M&A targets, with the company seeing significant growth opportunities in non-English speaking countries such as Japan, South Korea and the Middle East. he added. The rise of generative AI.
According to numbers Proofpoint shared with CNBC, the number of business email compromise attacks increased by 35% in Japan, 31% in South Korea, and 29% in the United Arab Emirates. Dhawan said this is happening because generative AI is making it easier for hackers to personalize emails in multiple languages.
The path from private to public
Founded in Silicon Valley in 2002, Proofpoint develops technology that helps businesses prevent phishing and other cyberattacks across a variety of platforms, including email, social media, mobile devices, and the cloud.
The company competes with companies such as Palo Alto Networks, CrowdStrike, and Fortinet, all of which have seen their stock prices soar over the past 12 months. CrowdStrike — the company that makes it happen Software issues caused global IT outages this year, up 65% year-on-year.
Palo Alto Networks and Fortinet stock prices rose 44% and 32%, respectively, during the same period.
Proofpoint went public in the U.S. in 2012, but was delisted in 2021 after Thoma Bravo acquired the company in a $12.3 billion deal. The acquisition followed investor concerns about slowing revenue growth.
Now, Proofpoint is looking to tap the public markets again.
“We’re a little different than your average company going for an IPO,” Dhawan said. “These companies tend to be smaller, they tend to have very different profiles, they tend to be uncertain in terms of profitability, and they tend not to be in a position to integrate easily.”
Proofpoint’s initial public offering is not the first IPO of a company acquired by Thomas Bravo in a private equity deal. In 2019, Dynatrace, the cybersecurity company Thoma Bravo took private in its 2014 acquisition, went public again in a New York listing.
Dhawan told CNBC that Proofpoint may raise “multiple rounds” of financing to expand ownership of the company by other private equity investors, and that Proofpoint may raise “multiple rounds” of financing to expand ownership of the company by other private equity investors, and that Proofpoint may raise “multiple rounds” of financing to expand ownership of the company by other private equity investors. He added that selling shares to pre-selected investors (instead of selling shares to pre-selected investors) is one of them. Options you are considering.
Dhawan said the company is “close to beginning the process” of raising capital from investors other than private equity owners. However, he stressed that the company has not formally started this process.
Proofpoint bosses say what sets the company apart from other tech and cybersecurity companies exploring similar IPO routes is its balance of growth and profitability, with double-digit growth and a strong market position. He said he expects leadership.
