Contact: Brenon Daly
Just days after we reported rumors that Dell was looking to acquire a unified threat management (UTM) vendor, the tech giant did indeed reach for one. However, it wasn’t the one we indicated. Dell said Tuesday that it will be picking up SonicWALL, less than two years after the security company went private in a $717m deal sponsored by Thoma Bravo.
The market chatter last week had Dell adding UTM rival Fortinet. However, even on a rough, back-of-the-envelope basis, a purchase of Fortinet would likely cost Dell at least four times as much as it probably paid for SonicWALL. Early indications are that Dell paid slightly more than $1bn for SonicWALL, while Fortinet garners a market valuation of $4.3bn, and that’s without an acquisition premium.
Dell didn’t release the price for SonicWALL, although it did note that the company generated $260m in trailing sales. The guidance would appear to indicate that SonicWALL was posting rather muted growth. When it went private, SonicWALL said it would do about $230m in sales in 2010. That would imply that SonicWALL only grew 13% in 2011, less than half the 33% rate put up by Fortinet last year. (Further, Fortinet is generating that growth off a significantly higher revenue base, and will top a half-billion dollars in sales this year.)
But in many ways, SonicWALL is a better fit inside the Dell portfolio than Fortinet. For starters, SonicWALL targets SMBs, where Dell traditionally focuses as well. (Although with recent releases, Dell has announced its aspirations for an enterprise foothold.) Both companies go to market largely through the channel, and even share some partners. Dell has actually been reselling SonicWALL for a decade. We’ll have a full report on this deal in tonight’s Daily 451.