HP Acquires ArcSight for $1.5 Billion - $43.50 Per Share in Cash
HP (NYSE:HPQ) and ArcSight Inc. (Nasdaq:ARST) made an official announcement Monday morning that HP would acquire ArcSight for $43.50 per share in cash, valuing the company at $1.5 billion. ArcSight shares closed Friday at $35.10 giving ArcSight a market cap of $1.21 Billion.
Cupertino, CA based ArcSight provides cybersecurity and compliance solutions that protect organizations from enterprise threats and has been a market leader with its SIEM solution. The company had revenue of $48.1 million in its most recent quarter ending July 31.
The acquisition will expand HP’s software and security portfolio and accelerate growth, an area that HP needs to work on, especially when matched up against competitor IBM. Since 2006, IBM has made 11 acquisitions to expand its range of offerings in the security space.
HP recently acquired Fortify Software, a San Mateo, CA based provider of products and services that help developers identify security flaws in software code, helping to make applications more secure. Also, don’t forget that HP just spent $2.35 Billion in a bidding war with Dell to acquire storage vendor 3PAR.
The IT Security space has been hot this year for M&A and private equity deals, the biggest being the recent $7.68 billion acquisition of security giant McAfee by Intel.
In May, private equity firm Apex Partners acquired a majority stake in Sophos in a deal reportedly valuing the company at $830 million. Also in May, Symantec announced that it would acquire VeriSign's Security Business for $1.28 Billion. On a smaller scale, digital advertising firm, the Rubicon Project, acquired SiteScout, a provider of anti-malware security technology based in Seattle.
In June, SonicWALL was acquired by an investor group led by Thoma Bravo, LLC in a transaction valuing the company approximately $717 million and paying SonicWALL shareholders $11.50 cash for each share. Also in June, Symantec acquired PGP Corporation and GuardianEdge, deals totaling over $370 million that were announced in April.
In July, IBM acquired IT compliance software provider BigFix for approximately $400 million. Also in July, GFI Software acquired security software firm Sunbelt Software for an undisclosed sum.
In August, CA Technologies announced an agreement to acquire Arcot Systems, Inc., a provider of authentication and fraud prevention solutions. Also in August, antivirus software firm AVAST announced a $100 million investment from private equity and venture capital firm Summit Partners.
Last week VeriFone announced it would acquire endpoint encryption solutions provider Semtek, valuing the company at $18 million.
M&A in the IT Security sector has been hot and it doesn't appear to be cooling down anytime soon. What's next?