Israeli-founded information security company Forescout Technologies announced on Thursday that it entered into a definitive agreement to be acquired by two global private equity firms for a transaction valued at $1.9 billion.
US private equity firms Advent International and Crosspoint Capital will acquire all outstanding shares of Forescout common stock for $33.00 per share in an all-cash transaction, according to the announcement.
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Forescout was established in 2000 by Israeli founders Oded Comay, Dror Comay, Hezy Yeshurun, and Doron Shikmoni, with headquarters in San Jose, California and a development center in Tel Aviv. The company delivers device visibility and control for enterprises and government agencies and is led by CEO and President Michael DeCesare.
“Forescout has established itself as a leader in device visibility and control, with the most advanced platform in the market,” said DeCesare in a statement. “We are still in early innings of a large market opportunity as every organization needs visibility into what is connecting to their network and how to mitigate against high-risk devices, including non-traditional IoT and OT devices.”
“This transaction represents an exciting new phase in the evolution of Forescout,” added DeCesare, who will continue to lead the company after the acquisition.
The transaction is expected to close later this year, after which Forescout will become a private company. It had first filed for IPO in 2017. Previously, it had raised over $125 million in total from investors such as Pitango Venture Capital, Aspect Ventures, and Wellington Management.
“As a private company, we will have additional bandwidth to focus on doing what we do best in solving some of the biggest challenges in cybersecurity today as more and more high-risk devices, including IoT and OT, connect to the network,” DeCesare wrote in a LinkedIn post after the acquisition announcement
The agreement includes a 30-day period in which Forescout can seek alternative acquisition proposals.
Bryan Taylor, head of Advent’s technology investment team, said in the statement that Forescout was “an ideal partner for Advent — as it’s a mission-critical business positioned to capitalize on key tech megatrends. The company has differentiated itself from its core competitors with its proprietary, agentless technology, making it ideal for large, complex organizations in a rapidly evolving cyber risk landscape.”
“As enterprises continue to shift to the cloud and decentralized networks, today’s chief information security officers are looking for secure solutions to increase visibility and provide orchestration, making their network controls more seamless,” said Greg Clark, Managing Partner at Crosspoint Capital. “Forescout’s platform is already ahead of the curve, and we believe we can further advance the company’s market position by applying the collective experience and expertise in cybersecurity software of the Advent and Crosspoint Capital team.”
Forescout reported that its total revenue for 2019 was $336.8 million.
The pending acquisition marks the second billion-dollar deal for an Israeli-founded company in a month. In early January, Israeli IoT security firm Armis announced that it agreed to be acquired by NY-based firm Insight Partners at a company valuation of $1.1 billion.
The deal is set to be finalized this month and was the first billion-dollar exit for an Israeli company in 2020. Following the acquisition, Armis will continue to operate independently and will be fully managed by its two co-founders, Yevgeny Dibrov, CEO, and Nadir Izrael, CTO, and the executive team.
Between 2013 and 2019, the value of Israeli cybersecurity exits totaled $11.3 billion.