DLP deal flow

Contact: Brenon Daly, Steve Coplan

When Trustwave recently reached for Vericept, the Chicago-based security services company joined a long list of acquirers of data-loss-prevention (DLP) technology. Over the past three years, we’ve seen roughly a baker’s dozen DLP deals, with the total spending on the transactions hitting $850m, according to our 451 M&A KnowledgeBase. Not surprisingly, both the size and valuations of recent DLP deals have declined sharply, sinking to 1-2 times trailing sales, which is down from a high of about 10x trailing sales.

The list of buyers of DLP, which basically works to snuff out insider threats and control the flow of data, includes all of the obvious IT security giants. Symantec gobbled up Vontu for $350m in November 2007, while McAfee has taken smaller bites. It paid $20m for Onigma in October 2006 and then followed that up almost two years later with the $46m purchase of Reconnex. Additionally, Websense, CA Inc, RSA and even Raytheon have made sizeable DLP acquisitions in recent years.

If we had to guess which large security provider will go shopping next in the DLP space, Check Point would probably be our choice. The vendor, which is best known for its firewall offering, could use additional security on the network edge. Check Point also shifted earlier this year to an appliance model, where distinct software ‘blades’ cover specific security threats. Among other benefits, that makes it much easier to plug acquired technology into Check Point’s existing platform. DLP startups that might be of interest include Verdasys, GuardianEdge and Safend, among others.

Select DLP deals

Date announced Acquirer Target Target revenue Deal value
September 10, 2009 Trustwave Vericept $10m* $20m*
January 5, 2009 CA Inc Orchestria $22m* $30m*
November 5, 2007 Symantec Vontu $30m $350m
October 25, 2007 Trend Micro Provilla Not disclosed $15m*
September 20, 2007 Raytheon Oakley Networks $33m* $193m
August 9, 2007 RSA [EMC] Tablus $6m* $50m*

Source: The 451 M&A KnowledgeBase *451 Group estimate