Contact: Scott Denne Scott Crawford
Adding threat intelligence to a wider security portfolio has potential, though as a stand-alone offering growth has been tough to come by. Against that backdrop, we’ve seen a notable uptick of acquisitions in this space, with Infoblox’ purchase of IID being the latest. The DNS security vendor will pay $45m in cash for IID and its threat intel capabilities, putting the deal right in the same neighborhood as several other recent transactions.
Today’s move combines two companies with a background in securing network identity. Infoblox has roots inside the network, while IID specializes in external networks. Part of IID’s early focus was to protect individuals and organizations from phishing risks and its offering has since matured into an intelligence aggregation and sharing strategy centered on IID’s ActiveTrust threat data exchange platform. The deal combines Infoblox’s ability to manage and control access to enterprise networks with threat intel gathered from multiple sources, including vetted contributors to ActiveTrust. IID will enrich Infoblox’s capabilities for providing secure DNS, network DHCP/IPAM services and control automation through greater insight into network threats. AGC Partners advised IID on its sale.
The potential to add threat intelligence to an existing channel and related product line is pushing up valuations in this segment. Last year, LookingGlass and Proofpoint paid $35m and $40m for Cyveillance and Emerging Threats, respectively. Though there was some variation in the multiples of those deals, most recent threat intel acquisitions have printed above market valuations. Infoblox appears to be paying north of 4.5x trailing revenue (based on its disclosure that IID had $10m in 2015 billings), while Emerging Threats fetched a valuation closer to 10x. Even FireEye’s purchase of iSIGHT, the largest we’ve tracked in the subsector at $200m, got done at 5x. The Cyveillance sale was the exception to this trend, yet it still landed more than most divestitures at just under 2x.
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