France’s Thales to buy Imperva in $3.6 bln cybersecurity deal

France’s Thales to buy Imperva in $3.6 bln cybersecurity deal

France’s Thales announced on Tuesday that it will acquire U.S. cybersecurity company Imperva for $3.6 billion. This move demonstrates Thales’ commitment to expanding its digital identity and security division and gaining market share in the United States, where Imperva serves major companies.

The acquisition price, which implies an enterprise value of 17 times 2024 operating earnings forecasts, has raised questions among some analysts. Nicolas Arpagian, vice-president at cyberconsulting firm HeadMind Partners, noted that it is unusual for a large French corporation to buy such an asset from a private equity firm. He also highlighted the challenge of integrating software and the need for well-trained personnel to manage and adapt it.

Shares in Thales initially fell almost 2% in early trading but later stabilized, showing a minimal decrease of 0.4% at 1035 GMT. Thales expects the acquisition to generate approximately $110 million of pretax synergies, including $50 million in cost savings and $60 million in revenue opportunities. The combined business is projected to have proforma revenues of 4.5 billion euros in 2024, rising to 5.4-5.5 billion in 2027.

Thales defended the purchase price, stating that it is paying 6.1 times sales for a business that Thomas Bravo had acquired at a multiple of five times and subsequently made profitable. Valuations for similar assets have recently been around 7-8 times sales, compared to the peak of 18-20 times during a market bubble in the previous decade. Thales CEO Patrice Caine expressed confidence in the valuation, emphasizing the significant impact it will have on the company’s scale in civil cybersecurity.

The acquisition aligns with the growing concern among global corporate executives about cyberattacks. Thales aims to enhance its earnings per share and add nearly $500 million in revenue through this deal. The company’s previous major acquisition was the purchase of digital identity company Gemalto for $5.6 billion in 2019.

Thales expects the acquisition to be completed in 2024, pending approvals, and does not anticipate significant obstacles. Morgan Stanley and Centerview Partners served as financial advisers to Thales during the transaction.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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