State-of-the-Art Technologies & Secure Development, Vendor Overview
Going private may help accelerate Tufin’s pivot to subscription-based revenue
Michael Novinson •
April 6, 2022
Tufin has agreed to be bought by private equity firm Turn/River Capital for $570 million just three years after the network security provider went public.
See also: Third Party Risk: Log4j Lessons
The Boston-based company said the proposed acquisition will enable Tufin to accelerate its mission to help enterprise customers use policy-based automation to address tomorrow’s security threats (see: Effectively address policy change management). The $13 per share deal is expected to close in the second quarter of 2022 and represents a 44% premium to Tufin’s Tuesday closing stock price of $9.03 per share.
“We believe Turn/River Capital is the ideal partner for Tufin as the company moves toward a subscription-based revenue model,” Tom Schodorf, lead independent director on Tufin’s board of directors, said in a statement. statement. “We are confident that this transaction with Turn/River will allow Tufin to accelerate this transition, expand into new markets and reach new customer segments.”
Tufin shares rose $3.91, or 43.3%, to $12.94 a share in premarket trading on Wednesday. That is the highest stock Tufin has traded since February 12, 2021. The company went public in April 2019, rising $108 million in a public offering on the New York Stock Exchange that valued Tufin at $453.6 million. Tufin is one of the smallest publicly traded securities firms by valuation, second only to IronNet and Cyren.
The transaction includes a 30-day “buy-in” period, allowing Tufin’s board of directors to rescind Turn/River Capital’s proposed acquisition and accept a superior proposal from another suitor should an offer materialize before 5 of May. Tufin declined to comment further. while Turn/River Capital did not immediately respond to a request for comment from Information Security Media Group.
“As a private company, we will have the opportunity to accelerate our growth through investments in our technology, people and marketing,” said Ruvi Kitov, Tufin’s co-founder, president and CEO, in a statement. “The Turn/River team specializes in helping software companies like Tufin, and with their partnership and experience I’m confident we’ll be able to achieve our long-term goals faster.”
Turn/River Capital has a limited presence in the cybersecurity market, investing in Austin, Texas-based application security testing provider Invicti in 2017 and leading a $40 million Series A funding round for enterprise web application security provider Netsparker in April 2018. network provocateur joined forces with SME-focused Acunetix to form Invicti, which in October 2021 received $625 million from Summit Partners.
In February 2020, Giro/River Capital invested an undisclosed amount in Romanian data loss prevention provider Endpoint Protection by CoSoSys. Tufin is the first publicly traded cybersecurity provider that Turn/River Capital has acquired.
“Tufin is an industry leader in network security policy management, helping enterprise clients protect their most critical network infrastructure and cloud assets,” said Dominic Ang, managing partner at Turn/River Capital. , it’s a statement. “We are incredibly excited to bring our best-in-class operations team, with their deep experience in marketing, sales and customer success, to our partnership with Tufin.”
Tufin was founded in 2005 by Kitov, now 48, and Reuven Harrison, Check Point veterans. Now 52, Harrison currently serves as Tufin’s CTO. Kitov owns 5.2% of the outstanding shares of Tufin, while Harrison owns 4.6% of the outstanding shares, and both have agreed to vote their shares in favor of the Turn/River Capital acquisition. The main institutional investors in Tufin are ETF Managers Group and EVR Research.
The company’s revenue increased in 2021 to $110.9 million, up 10% from $100.8 million a year earlier. Tufin’s net loss rose to $36.9 million, or $0.99 per share, slightly worse than a net loss of $35.4 million, or $0.99 per share, the company posted in 2020.
Other recent activity
Several publicly traded cybersecurity vendors have been picked up by financial or strategic buyers in recent months. On the private equity side, Advent and Permira closed their $14 billion acquisition of McAfee in March, Permira agreed in December to buy email security firm Mimecast for $5.8 billion, and Thoma Bravo bought security provider email provider Proofpoint for $12.3 billion in August.
As for technology buyers, public cloud and search giant Google agreed in March to buy threat intelligence and incident response provider Mandiant for $5.4 billion, and information management provider OpenText acquired security provider email Zix in December for $860 million.