Contact: Brenon Daly
After a fitful and protracted M&A process, Courion has been sold to a private equity (PE) firm, according to several market sources. The deal, which we understand is closed, but has not been announced, would be the third acquisition by a buyout shop of an identity-related security vendor in the past half-year. However, our understanding is that Courion got about half the valuation of the other two larger identity and access management (IAM) vendors that were recently acquired.
Several sources indicated Courion traded at around $70m, which works out to roughly 2x sales. Rivals BeyondTrust and SailPoint sold for closer to 3x sales and 5x, respectively. (Subscribers to 451 Research M&A KnowledgeBase can see our estimated terms for BeyondTrust and SailPoint.)
In addition to those financial acquirers, many of the largest strategic shoppers – including Microsoft, IBM and CA – have been snapping up IAM technology, in part to help secure cloud offerings. The reason? Security remains the top-ranked inhibitor of cloud technology adoption, according to ChangeWave Research, a service of 451 Research. In the cloud – with its centralized IT resources and pooled data – knowing who is who and who has access to what is fundamental. Further, when users are accessing corporate resources that live outside the firewall, often from devices no longer under enterprise control, perimeter-based access controls are no longer effective.
That has certainly resonated with customers. In a survey of more than 200 IT security professionals in 2014, 451 Research’s TheInfoPro found that one-quarter (24%) of respondents forecast that they would be spending more in 2015 on identity-related security technology than they did in 2014. Not a single respondent indicated they would be trimming their budget for this crucial technology. (Identity was the only specific sector – among the dozen that we asked about – that didn’t have a single response indicating lower year-on-year spending.)
As is often the case in emerging markets, however, the strong demand for IAM hasn’t been evenly distributed across the vendors. Symplified, an early entrant in the IAM market that raised nearly $50m in venture funding, wound down last summer and sold its assets to EMC for pennies on the dollar. And while Courion is a far cry from the scrap-sale of Symplified, the company had struggled to put up growth in recent years. That blunted VC’s interest in putting new money into Courion, which hadn’t raised in about a decade, and ultimately put pressure on its valuation.
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