Thales, a multinational company based in France, has announced its acquisition of cybersecurity firm Imperva from Thoma Bravo for a whopping $3.6 billion. This acquisition will give Thales a significant presence in the application security market in both North America and Europe.
Thales has already made several notable acquisitions in the cybersecurity domain, further bolstering its portfolio. In 2019, Thales acquired Gemalto for $5.3 billion, followed by Vormetric for approximately $420 million in 2016. More recently, the company acquired European startups S21sec and Excellium for a total of $125 million in 2022. Thales also purchased Tesserent for $118 million earlier this year.
Imperva, the target of Thales’ latest acquisition, is a company with a workforce of 1,400 employees. Its most recent revenue of $500 million was generated from its application security, API, and data security products. Imperva boasts an impressive customer base that includes large organizations in sectors such as financial services, healthcare, education, technology, and retail. The company claims that 35% of Fortune 100 companies are among its customers.
Thales expects that the acquisition of Imperva will boost its cybersecurity revenue to more than $2.6 billion. The deal is set to be finalized by 2024. Thales chairman and CEO Patrice Caine describes the acquisition as a significant milestone in Thales’ cybersecurity strategy, stating that it provides a unique opportunity to accelerate their cybersecurity capabilities.
Before Thales’ acquisition, Imperva was purchased by Thoma Bravo for $2.1 billion in 2018. After the transaction closed, Thoma Bravo took Imperva private by paying shareholders $55.75 per share in cash. Over the four years under Thoma Bravo’s ownership, Imperva completed several acquisitions to strengthen its capabilities in core markets, including CloudVector, Distil Networks, and Prevoty.
Thoma Bravo itself has made numerous security-related acquisitions in recent years. Some of the major purchases in their portfolio include Proofpoint in 2021, McAfee in 2021, Sophos in 2019, LogRhythm in 2018, and Veracode in 2018. Currently, Thoma Bravo’s cybersecurity portfolio consists of 13 vendors across various market segments.
Thales’ agreement to pay $3.6 billion for Imperva represents a significant return on investment for Thoma Bravo, with the acquisition price being a sevenfold multiple of Imperva’s 2022 revenue. Rik Turner, an Omdia analyst, believes that the high valuation likely reflects Thales’ desire to expand into the markets where Imperva operates. In particular, Imperva provides Thales with an opportunity to compete in the application security and API security markets, which are currently in high demand due to enterprise cloud adoption trends.
The application security market has been booming in recent years. According to market analysis firm Vantage Market Research, its value was estimated to be around $7 billion in 2022 and is projected to reach over $26 billion by 2030. The API security market, a subset of the application security market, is also experiencing rapid growth, with projected revenue expected to surpass $3 billion by 2028.
While Thales primarily sells to the French government as a French company, Turner speculates that Thales may be aiming to expand its presence in North America with the acquisition of Imperva. Alternatively, Thales might be seeking to establish itself as a European powerhouse in the application security and API security space.
This acquisition comes at a time when Thales is shifting its marketing focus from being an identity technology provider to a more comprehensive data security and encryption provider. Richard Stiennon, chief research analyst at IT-Harvest, suggests that Thales hopes to leverage Imperva’s solutions to sell to its existing global customers, as the company has a history of growth through acquisitions.
Thales’ acquisition of Imperva will undoubtedly strengthen its position in the application security market and expand its presence in both North America and Europe. With the growing importance of cybersecurity in today’s digital landscape, this acquisition sets Thales on a trajectory of continued growth and success in the cybersecurity industry.