Sasi it security market overview 3 15

SASI IT Security Market Overview

Dan Blank, Managing Director

W. 781 820-6245 [email protected]

© Copyright 2006 SASI, LLC. All rights reserved

S S IASTRATEGIC ADVISORY SERVICES INTERNATIONAL, LLC

STRATEGIC ADVISORY

SERVICES INTERNATIONAL, LLC


2

Outline

• IT Security Market Insights and Emerging Company Market Map

• 2014 M&A and Venture Funding Review

• 2015 M&A, Venture Funding & IPO Outlook

• SASI Overview

• Appendix: 2014 M&A Transactions

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Summary

2014 was an active year for the IT Security Market

Recently minted public companies gained traction in the market and in the

eyes of public investors

The M&A market was hot, with aggregate consideration of $4.8 billion

and a 40% increase in the number of transactions to 95 and a 30%

increase in median deal size to $32 million

The venture market maintained a very healthy pace with $1.5 billion of

aggregate financing and 135 rounds of funding

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IT Security Market Insights – Customer Trends

Information Security has emerged as regular front-page news • Customers of IT Security solutions have revisited the funding and the attention devoted to these

solutions in light of the enormous impact on their brand and the threat of significant financial

loss

50% of Corporate data traffic is outside the firewall• Applications continue to move to the cloud

• Mobile devices are a more prevalent access point to the enterprise

Hackers are gaining in sophistication and are better funded

Companies are coming to terms with the fact that they will be compromised, and thus,

are more focused on responding quickly to attacks

Prevention is becoming an area of increasing focus

Decision making dichotomy• Some customers have elevated cyber security to the board room, acting quickly in some cases,

with point solutions, while

• other customers are considering 4 to 5 year plans and approaching security architecture more

strategically

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IT Security Market Insights – Solution Providers

Identity and Access Management companies have become more critical with

increased adoption of Cloud applications and SaaS models

Mobile device management and application management solutions are in greater

demand

Emerging significant players such as Palo Alto Networks are gaining traction with

new solutions that are pulled along with existing core offerings

Security Solution Providers are expanding market focus from SMB and Telco into

the Enterprise

A number of new companies have grown to the point where they have been added to

our emerging company market map

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IT Security Emerging Company Market Map

Identity & Access Management AlertEnterpise Courion Fischer International Lieberman Software SailPoint/Thoma Bravo

Avatier Crosschx Forgerock Okta Stealthbits Tech

Beta Systems Dashlane FoxT (Parallax) Omada Trustev

Caradigm Deep Identity G2 Web Services OneLogin Xceedium

Centrify E-Trust Identity Forge Ping Identity Xyverify

Cloudlock Evidian Iovation Nexus/Portwise

Authentication Auth0 BitGo Duo Security Pointsharp Socure

Authentify BlockScore HID Global SecureAuth Sonavation

Authy Deepnet Security Id.me Securenvoy Telesign

BioCatch Delta ID LaunchKey Semaphone

Bionym Digital Authentication Tech. NeXus SMS PasscodeApplication/Database Security Acunetix Contrast Security N-Stalker Quotium Veracode (in Reg)

Appthority DB Networks NTObjectives Rapid7 Virtual ForgeArxan Elliptic Technologies Portswigger Secure64 Software Vormetric Checkmarx Klocwork/Rogue Wave Pradeo Security Innovation Onapsis

Endpoint Protection Awareness Technologies Bromium HEAT (fka Lumension) Promisec ThreatTrack Security Bit Defender Confer Invincea/Sanboxie Quarri Technologies Webroot Bit9 CrowdStrike Malwarebytes SentinelOne Zscaler Blue Ridge Networks Cybereason Observable Networks Spikes security

Threat Intelligence and Area 1 Security BitSight Technologies eIQ networks iboss NorseSecurity Intelligence and Analytics Ara Labs CrowdStrike Endgame Interset VidSys

Bay Dynamics CyberFlow Analytics Farsight Security Lookingglass Cyber

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IT Security Emerging Company Market Map (cont.)

Network Access Control/Firewalls, Acess Layers Bradford Networks Impulse Point Ionic Security VidderGateways/Software Defined Perimeter Auconet ForeScout InfoExpress Lancope Mobile (MDM, MAM) AirPatrol Good Technology Mojave Networks V-Key Wandera

AXON Ghost Sentinel Graphite Software Nativeflow Victrio White SkyBeCrypt iboss NowSecure Bluebox Security Lookout Optio Labs

Advanced Threat Detection/Protection Agari Cylance iboss PhishLabs Shadow Networksand APT Confer Cyphort Infocyte Seculert Trustlook

CounterTack Damballa Key Cybersecurity CyberSense eSentire Lastline

UTM Actiance Araxid Gateprotect Kerio OpenDNS Aker Security Solutions Clearswift GFI Software My Digital Shield Untangle

Data Loss Prevention/ Governance Adallom Digital Guardian GTB Technologies Intelisecure VenafiBitglass Fidelis Infowatch Privacy Analytics Veradocs Code Green GigaTrust Infrascale Red Lambda

Cloud Adallom Cloud Compare Elastica Netskope VeradocsBitglass CloudLock Krimmeni Technologies Threat Stack

Web Security and Gateways Distil Networks Edgewave iboss Shape Security Signal SciencesAnti-Fraud AdmitOne Easy Solutions Guardian Analytics Sift Science ThreatMetrix Incident Response Bit9 Rapid7 Resilient Sys (fka CO3 Systems)Other Endgame Integrata Security SourceClear ThreatConnect Wombat Security Tech.

Fortress Risk Mgmt PhishMe Synack ThreatStream ZeroFOX

HackerOne Pwnie Express Stealth icebrg.io Menlo Security Protectwise

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IT Security Market Insights: IPO’s

The IPO window is narrow but the public equity markets remain strong and a number of security companies are

poised for an IPO

2014 IPO, CyberArk, nearly doubled on its debut, increased an additional third by the end of the year,

and doubled again in the first quarter of this year before trading down 20% in March (currently trading

at 15x Revenue)

Other 2014 IPOs struggled

• Imprivata was relatively flat initially but traded off and ended the year down 20% (3x EV/Rev)

• Varonis traded up strong initially but lost much of the gain in the fall before recovering the gain

at the end of the year (currently trading at 7x Rev)

• Mobile Iron traded down and ended the year off nearly 10% (currently trading at nearly 5x Rev)

The IPO Class of 2013 was flat to down in 2014

• Barracuda Networks traded down for much of the year before recovering at the end of the year

(trading currently at close to 8x Rev)

• Fire Eye ended off 30% despite doubling in the first quarter (trading currently at nearly 15x Rev)

The IPO class of 2012 fared better in 2014

• Palo Alto Networks doubled in 2014 and rose an additional 20% YTD (now trading at 16x Rev)

• Proofpoint increased 50% for the year despite a 30% drop in Q2 (now trading close to12x Rev)

• Qualys ended the year up 70% (currently trading close to 12x Rev)

• AVG traded up and down in a 20% band and ended up 18% (currently trading at 3x Rev)

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2014 IT Security M&A and

Venture Funding Review

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2014 M&A Summary

M&A Volume, transaction size and aggregate consideration continue to rise

Valuations for companies in which the transaction value was disclosed and the target revenue was

available reflect a valuation range of 2x to 50x revenue

• The Median Enterprise Value to Revenue was 5x

• Notable exceptions to this range include

o FireEye/Mandiant at nearly 10x

o And early stage targets which are estimated to have sold for 15x to 50x

Pulse Secure/Mobile Spaces – 50x

Proofpoint/NetCitadel – 24x

LANDesk/LetMobile – 15x

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2014 IT Security M&A Review

Source: The 451 Group, SASI Analysis

Select transactions for which the value was disclosed and revenue is available or estimated

Date

Announced

Buyer Seller Seller Description Ent. Value EV/ Rev

10/1/2014 Pulse Secure LLC MobileSpaces offers a BYOD policy-managed workspace that protects mobile enterprise apps and data against loss and leakage $100 50

5/20/2014 Proofpoint Inc. NetCitadel Inc. automated security incidence response $24 24

5/21/2014 LANDesk Software LetMobile gateway-based, device agnostic, security solutions for enterprise mobility. $15 15

1/2/2014 FireEye, Inc. MANDIANT Corporation incident response and computer forensics solutions and services. $989 10

8/25/2014 PS&C Limited Pure Hacking Pty. Ltd. Dedicated penetration testing services focusing on network application and Internet security $8 8

10/20/2014 Citrix Systems Inc. RightSignature LLC software-as-a-service that allows users to sign documents online $38 5

2/23/2014 Good Technology BoxTone Mobile Service Management $100 5

8/12/2014 Thoma Bravo LLC SailPoint Technologies integrates role management, access request management, and compliance management solutions $300 5

8/12/2014 Kaseya Intntl Scorpion Software Corp. offering integrated two factor authentication, single sign on and password management solutions $20 5

3/31/2014 Regenersis PLC Blancco Oy Ltd. data erasure and computer reuse solutions $83 5

12/9/2014 Belden Inc. Tripwire advanced threat, security and compliance solutions $710 5

9/3/2014 AVG Technologies Location Labs mobile safety and security subscription services sold in partnership with Verizon, AT&T, Sprint, T-Mobile, ... $140 4

7/21/2014 ACI Worldwide, Inc. Retail Decisions plc specialist payment fraud prevention provider $205 4

4/24/2014 GB Group PLC DecTech Solutions Pty Ltd fraud detection and prevention solutions across multiple languages, clients and geographies $18 4

9/2/2014 Veritas Capital BeyondTrust Software Inc. authorization management, access control and security solutions for virtualization and cloud environments $310 3

2/10/2014 Sophos Plc Cyberoam Technologies Unified Threat Management (UTM), next-generation firewall and network security $80 2

Median 5

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M&A Segmentation


Most active acquirers- # Companies acquired

Google- 4 AVG - 2 Cloudflare - 2 Palo Alto Networks - 2

Good Technology - 3 IBM - 2 Imperva - 2 Sophos - 2

Notable transactions segmented by technology focus

Identity and Access Management IBM/Crossideas Thoma Bravo/SailPoint HID Global/Lumidigm ASSA ABLOY/IdenTrust

IBM/Lighthouse Ping Identity/Accells Google/SlickLogin

SaaS Security CipherCloud/CloudUp Imperva/Sky Fence Intermedia/SaaSID (2013)

Incident Response FireEye/Mandiant Bit9/Carbon Black Palo Alto Networks/Morta Security

Proofpoint/NetCitadel

Mobile Vmware/Airwatch ($1.5B) Google/Divide ($120M) Blackberry/Secusmart Ping Identity/Accells

AVG/Location Labs ($140M) Pulse Secure/MobileSpaces ($100M) Digital Guardian/Armor5 LANDesk/LetMobile

Good Technology/Fixmo & Macheen & BoxTone Sophos/Mojave Networks

Notable transactions segmented by acquirer capital structure

Recent Public Companies FireEye/Mandiant Palo Alto Networks/Morta Security/Cyvera

Private Companies Bit9/Carbon Black Ping Identity/Accells CipherCloud/CloudUp Digital Guardian/Armor5

Bitsight Technologies/Anubis Networks Cloudflare/Gazzang & CryptoSeal CloudLock/Innovode

Private Equity Thoma Bravo/SailPoint LANDesk/LetMobile Veritas Capital/BeyondTrust Siris Capital/Pulse Secure

Established Pure Play Providers Sophos/Mojave Networks &

Cyberoam Technologies

Imperva/SkyFence & Tomium

Largest Transactions FireEye/Mandiant ($989M) Gemalto/Safenet ($890M) Belden/Tripwire ($710M)

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Most Active Acquirers (2010-2014)


# of

Txns Buyer Targets

10 Sentrigo, NitroSecurity, Inc. [fka Go2Market.com], LynuxWorks (ValidEdge

technology), Stonesoft Oyj, tenCube, InternetSafety.com, McAfee Inc [fka Network

Associates], Nordic Edge, Sensory Networks, PasswordBox, SyncDog

9 Applied Identity, Apere, RightSignature, Rohati Systems, Pari Networks, Virtuata,

Cognitive Security s.r.o., Sourcefire, ThreatGRID

7 Archer Technologies, NetWitness Corporation, Silicium Security, Silver Tail Systems,

Aveksa, PassBan Corp., Symplified Inc. (IP assets)

7 Widevine Technologies [fka Internet Direct Media, Inc.], zynamics [fka Sabre

Security], VirusTotal, Impermium, SlickLogin, Spider.io, Divide Mobile (fka Enterproid)

6 BitArmor Systems, Intellitactics, Breach Security, M86 Security, Application Security,

Inc. [aka AppSecInc], Cenzic

6Fixmo, Macheen, BoxTone, AppCentral, Copiun, Cloudsync

5 PrivacyChoice, Location Labs [fka WaveMarket Inc.], Norman Safeground AS [fka

Norman ASA] [FSN Partners], droidSecurity, Bsecure Technologies

5 Lumigent Technologies, Likewise Software (Active Directory Bridge business unit),

GentleSecurity Software S.A., eEye Digital Security, Blackbird Group

5 Valimo Wireless Oy, Todos AB, Data Security Systems Solutions Pte Ltd. [dba DS3],

Iron Stratus [aka IronStratus] [fka Conformity], SafeNet, Inc. [Vector Capital]

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Most Active Acquirers (2010-2014 cont.)


# of

Txns Buyer Targets

5 Gideon Technologies, PGP Corporation, GuardianEdge Technologies,

VeriSign Inc. (identity and authentication business), PasswordBank

Technologies

5 SonicWALL, Tripwire (acq by Belden 12-14), Crossbeam Systems, Blue Coat

Systems (seeking buyer), SailPoint Technologies

4

Mojave Networks, Cyberoam, DIALOGS, Astaro

4HiSoftware, ControlGuard LTD (business and assets), NETconsent, SE46 AB

4 Q1 Labs, Trusteer Inc., CrossIdeas s.r.l [fka Engiweb Security], Lighthouse

Security Group LLC (business operations)

4 SMobile Systems, Altor Networks, Mykonos Software, Webscreen Systems

4 Maildistiller, Abaca Technology, Armorize Technologies, NetCitadel

4 Volcker Informatik AG, e-DMZ Security, Symlabs, BiTKOO

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2014 Venture Funding Review

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2014 IT Security Venture Funding Review

Source: VentureSource, SASI Analysis

Venture funding remained strong with 136 companies raising close to $1.5B

The average financing was nearly $11M

The median financing was just short of $7M

Mobility is a common investment theme

Significant financings included 16 rounds exceeding $25M per round and accounted for

nearly half of the aggregate funding for the year ($697M)

• Transactions above $50M accounted for nearly 20% of the aggregate funding and

included:

o CipherCloud at $50M

o Okta at $75M

o Lookout at $150M

o Interestingly, all of these largest rounds included common investors such as

Andreesen Horowitz and two included Khosla and Greylock (Okta and

Lookout)

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2014 IT Security Venture Funding Review

Source: Venture Deal, SASI Analysis

Company Funding Date Amount Raised Company Funding Date Amount Raised

LaunchKey 12/18/2014 $3,000,000 Ping Identity 9/18/2014 $35,000,000

EdgeWave 12/18/2014 $2,000,000 Sentrix 9/18/2014 $6,000,000

OneLogin 12/16/2014 $25,000,000 Auth0 9/18/2014 $2,400,000

405Labs 12/12/2014 $2,329,998 eSentire 9/16/2014 $12,700,000

Threat Stack 12/11/2014 $5,000,000 Bastille Networks 9/15/2014 $1,500,000

Nok Nok Labs 12/10/2014 $8,250,000 Veracode 9/11/2014 $39,999,983

Area 1 Security 12/10/2014 $8,000,000 Authy 9/9/2014 $2,300,000

DB Networks 12/9/2014 $17,000,000 Trustlook 9/6/2014 $3,000,000

Icebrg.io 12/5/2014 $2,500,000 Delta ID 9/5/2014 $5,000,000

NexDefense 12/5/2014 $2,400,000 IntelliView Technologies 8/29/2014 $1,500,000

ThreatStream 12/4/2014 $22,000,000 Socure 8/27/2014 $4,297,485

NowSecure 12/2/2014 $12,500,000 Zumigo 8/25/2014 $6,000,000

CloudLock 11/24/2014 $6,700,000 MicroPower Technologies 8/21/2014 $2,000,000

ThreatConnect 11/21/2014 $4,000,000 Toopher 8/21/2014 $790,599

CipherCloud 11/20/2014 $50,000,000 vArmour Networks 8/20/2014 $36,000,000

Endgame 11/20/2014 $30,000,000 GuardiCore 8/19/2014 $11,000,000

Veradocs 11/19/2014 $14,000,000 Lookout 8/13/2014 $150,000,000

V-Key 11/19/2014 $12,000,000 Lastline 8/13/2014 $10,000,002

Menlo Security 11/19/2014 $10,500,000 Life360 8/7/2014 $25,000,000

Infocyte 11/14/2014 $500,000 Vectra Networks 8/6/2014 $25,000,000

Razberi 11/13/2014 $3,500,000 SecureAuth 8/5/2014 $5,710,450

Evident.io 11/11/2014 $9,850,000 CounterTack 7/25/2014 $5,000,000

Krimmeni Technologies 10/30/2014 $11,700,000 BEW Global 7/23/2014 $14,000,000

Co3 Systems 10/30/2014 $10,000,000 EdgeWave 7/23/2014 $11,000,000

Socure 10/28/2014 $2,500,000 Privacy Analytics 7/23/2014 $3,500,000

Argyle Data 10/27/2014 $4,500,000 Bay Dynamics 7/16/2014 $8,000,000

Fortress Risk Management 10/23/2014 $3,500,000 Malwarebytes 7/11/2014 $30,000,000

Spikes Security 10/22/2014 $11,000,000 Wombat Security Technologies 7/10/2014 $6,700,000

Nopsec 9/30/2014 $3,000,000 My Digital Shield 7/10/2014 $500,000

Bionym 9/25/2014 $14,000,000 Elastica 6/30/2014 $18,313,468

Agari 9/23/2014 $15,000,000 ProtectWise 6/30/2014 $14,060,000

Protenus 9/23/2014 $770,000 Illumio 6/30/2014 $7,999,999

Duo Security 9/22/2014 $12,000,000 Access Systems 6/30/2014 $4,000,000

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2014 IT Security Venture Funding Review (cont.)

Source: Venture Deal, SASI Analysis

Company Funding Date Amount Raised Company Funding Date Amount Raised

Threat Stack 6/30/2014 $2,671,000 Damballa 4/22/2014 $13,000,000

VidSys 6/30/2014 $349,000 Caspida 4/17/2014 $2,000,000

Axon Ghost Sentinel 6/30/2014 $25,000 Shadow Networks 4/11/2014 $1,500,000

Disrupt6 6/30/2014 $25,000 Certes Networks 4/9/2014 $1,680,000

BlockScore 6/27/2014 $2,000,000 Apprity 3/31/2014 $8,000,000

White Ops 6/25/2014 $7,000,000 LiveSafe 3/25/2014 $6,500,000

Well Checked Systems International6/24/2014 $1,400,000 Digital Guardian 3/19/2014 $12,000,000

ForgeRock 6/19/2014 $30,000,000 ID.me 3/17/2014 $10,000,000

Onapsis 6/18/2014 $9,580,000 Shadow Networks 3/13/2014 $10,199,301

BitGo 6/17/2014 $12,000,000 Niara 3/13/2014 $9,000,000

BioCatch 6/17/2014 $10,000,000 Optio Labs 3/7/2014 $10,000,000

Virtru 6/17/2014 $6,000,000 Pythian 3/6/2014 $6,000,000

Quantum Technology Sciences6/17/2014 $2,100,000 Caspida 3/5/2014 $9,524,995

CounterTack 6/16/2014 $5,000,000 Nok Nok Labs 2/27/2014 $16,500,000

SourceClear 6/12/2014 $1,500,000 CounterTack 2/27/2014 $3,000,000

Exabeam 6/11/2014 $10,000,000 CyberSense 2/26/2014 $5,000,000

Infrascale 6/6/2014 $16,300,000 Shape Security 2/25/2014 $40,000,000

HackerOne 5/30/2014 $9,000,000 CounterTack 2/25/2014 $3,000,000

Observable Networks 5/30/2014 $2,450,000 Cylance 2/21/2014 $20,000,000

RiskIQ 5/29/2014 $25,000,000 ThreatStream 2/21/2014 $4,000,000

Sonavation 5/22/2014 $18,569,153 Ionic Security 2/20/2014 $25,500,000

Signal Sciences 5/21/2014 $2,000,000 ioSafe 2/20/2014 $2,500,000

Sumo Logic 5/20/2014 $30,000,000 Elastica 2/19/2014 $6,300,000

Dashlane 5/20/2014 $22,000,000 CloudPassage 2/13/2014 $25,500,000

Life360 5/14/2014 $25,000,000 Cybereason 2/12/2014 $4,600,000

Sift Science 5/14/2014 $18,000,000 Ara Labs Security Solutions 2/10/2014 $500,000

Area 1 Security 5/6/2014 $2,500,000 Quantum Technology Sciences2/7/2014 $2,300,000

ZeroFOX 5/1/2014 $11,000,000 Uniken 1/27/2014 $4,900,000

Vorstack 5/1/2014 $5,200,000 SafeInstance 1/23/2014 $3,067,501

Red Lambda 5/1/2014 $200,000 Adallom 1/22/2014 $15,000,000

Vidder 4/30/2014 $4,798,660 Virtru 1/22/2014 $4,000,000

Signifyd 4/25/2014 $2,199,983 Bluebox Security 1/20/2014 $18,000,000

Sentinel Labs 4/24/2014 $12,000,000 Confer 1/16/2014 $8,000,000

Synack 4/24/2014 7,500,000$ Integrata Security 1/16/2014 $750,000

HackSurfer 4/23/2014 3,500,000$ NetClarity 1/8/2014 $260,000

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2015 IT Security M&A,

Venture Funding and IPO Outlook

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2015 IT Security M&A Outlook

Deal volume should increase as the number of venture-financed companies in the last few years has

outpaced the number of exits and private investors seek to take a bird-in-the hand approach to

seeking liquidity

Median price to revenue multiples are likely to remain healthy at 5x and particularly unique

solutions will command a significant premium to the median

Leading private company segments for M&A include the following:

• Mobile

• SaaS players

• Identity & access management

• Vulnerability assessment

• Incident response

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2015 Venture Funding and IPO Outlook

Venture Funding

• Venture should remain strong

• Later stage funding will continue, particularly if the IPO window remains narrow and companies

feel pressure to compete by spending greater amounts on sales and marketing

Private Equity

• PE firms are likely to remain active including:

o Thoma Bravo which has just agreed to sell BlueCoat to Bain for $2.4B, has taken SonicWall

private for $636M, sold Tripwire to Belden, acquired SailPoint, and through LANDesk,

acquired MobileSpaces

o Veritas Capital may seek to leverage its investment in BeyondTrust

o Apax would realize some liquidity from its public registration of Sophos

o Welsh Carson could register Alert Logic for an IPO

o Vista Equity is seeking a buyer for Websense ($890M 2013 acquisition), and is rumored to

be in discussions with Raytheon (which did not proceed with the BlueCoat acquisition)

o Clearlake Capital recently acquired FrontRange Solutions and combined with Lumension to

form HEAT Software

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2015 Venture Funding and IPO Outlook

Candidates for a 2015 IPO include:

• Good – $100M S-1 Registration last May

• Veracode – Filed S-1 at an IPO valuation rumored to exceed $1B

• Trustwave – withdrew its 2011 $100M S-1 registration last May

• LogRhythm

• Mimecast

• OneLogin

• SkyHigh

• Sophos – Apax Partners may be eyeing a valuation exceeding $1B on the LSE

• Vormetric

• Docusign – Has some time after raising an additional $85M at a $1.6B valuation in

• Lookout

• Ping

• CloudFlare

• Alert Logic

• Bit9 - talk since 2012, yes

• Rapid7- talk since 2012, yes

• Digital Guardian (fka Verdasys)? talk since 2012

• CORE Security Technologies? talk since 2012

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SASI Overview

STRATEGIC ADVISORY



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Outline

• SASI Overview

• Market Expertise

• Strategic Buyer Relationships

• SASI Transactions

• Team Profiles

STRATEGIC ADVISORY



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SASI is a boutique M&A advisory firm focused on serving investors and entrepreneurs in the IT

industry.

We represent leading venture backed private companies who are exploring strategic M&A

options.

SASI Overview

M&A Process

Valuation Analysis

Industry Expertise:• Strategic Buyer Relationships

• Market & Competitive Trends

SASI Core Competencies

Strategic Planning

Market & Competitive

Research

Negotiation

With the following benefitsProvide an Integrated

Approach to Sellside M&A

Highest likelihood of creating a competitive bidding

situation with a successful outcome due to:

Targeting: SASI is able to quickly identify A list buyers,

avoiding wasted calls and meetings

Positioning: Each possible buyer has a unique set of

characteristics and reasons for acquiring the target. SASI

understands this and tailors the messaging to each buyer.

Negotiating: In depth knowledge of the buyers and the

industry positions SASI with insights that are critical to a

successful negotiation

Contacts: SASI knows the leading acquirers and has built

solid relationships over the last 18 years

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Information Technology(Semiconductors – Systems – Software - Software as a Service – Professional Services)

Market Expertise

IT Infrastructure

Networking

Technologies

Digital Networked

Home

Data Protection /

Storage

Cloud Computing

& Services

Wireless

Technologies

Aerospace &

Defense

IT Security

SASI

Expertise

Note: Core areas of expertise highlighted in blue

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Strategic Buyer Relationships

SASI is currently in discussions with or has worked with the following selected strategic buyers…

Industry Leaders

Networking/Security

http://www.ca.com/

http://www.ca.com/

http://www1.us.dell.com/content/default.aspx?c=us&l=en&s=gen

http://www1.us.dell.com/content/default.aspx?c=us&l=en&s=gen

http://www.emc.com/index.jsp

http://www.emc.com/index.jsp

http://www.hds.com/

http://www.hds.com/

http://www.hp.com/cgi-bin/sbso/exit.cgi?goto=hp/index

http://www.hp.com/cgi-bin/sbso/exit.cgi?goto=hp/index

http://www.netapp.com/

http://www.netapp.com/

http://www.symantec.com/

http://www.symantec.com/

http://www.cisco.com/en/US/hmpgs/index.html

http://www.cisco.com/en/US/hmpgs/index.html

http://www.intel.com/index.htm?iid=HMPAGE+Header_1_Logo

http://www.intel.com/index.htm?iid=HMPAGE+Header_1_Logo

http://www.ibm.com/us/

http://www.ibm.com/us/

http://www.motorola.com/

http://www.motorola.com/

http://www.sonicwall.com/

http://www.sonicwall.com/

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Semiconductor & Other

Strategic Buyer Relationships

Storage Industry

http://www.jabil.com/index.html

http://www.jabil.com/index.html

http://www.sanmina.com/index.html

http://www.sanmina.com/index.html

http://www.amcc.com/

http://www.amcc.com/

http://www.broadcom.com/

http://www.broadcom.com/

http://www.kodak.com/

http://www.kodak.com/

http://www.flextronics.com/

http://www.flextronics.com/

http://www.quest.com/

http://www.quest.com/

http://www.ironmountain.com/index.asp

http://www.ironmountain.com/index.asp

http://www.emulex.com/

http://www.emulex.com/

http://www.quantum.com/index.aspx

http://www.quantum.com/index.aspx

http://www.overlandstorage.com/index.html

http://www.overlandstorage.com/index.html

http://www.westerndigital.com/

http://www.westerndigital.com/

http://www.sandisk.com/Default.aspx

http://www.sandisk.com/Default.aspx

http://www.iomega.com/na/landing.jsp?FOLDER<>folder_id=63193&ASSORTMENT<>ast_id=63191&bmUID=1148341003791








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Selected SASI Transactions

June 2010

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Selected SASI Transactions (cont.)

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Team ProfilesDan Blank, Managing DirectorDan has spent the better part of the last twenty years leading and advising emerging-growth technology

companies. As an investment banker with Adams, Harkness and Hill, Dan helped dozens of companies to

realize in excess of $1 billion in market value. A Group Leader in the Software and Internet Practice, Dan

steered client companies through buy-side and sell-side M&A transactions, IPOs, follow-on offerings, and

private placements. Dan was then recruited to lead the business development efforts for Mpower

Communications, a publicly traded telecommunications provider. Dan expanded his scope at Mpower to the

sales organization, where he played a leading role in restructuring the 500 person sales organization.

He redesigned training, compensation and performance analysis, thereby increasing revenue and margin

while reducing customer acquisition costs. Dan was then asked to spearhead the corporate development

efforts and was responsible for divesting three material business units. Dan was later recruited to Infinia

Corp., a Paul Allen-financed solar equipment manufacturer. Dan earned a B.A. in Economics from

Washington University in St. Louis and an MBA from Babson College.

John Rotchford, Managing DirectorPrior to founding Strategic Advisory Services International, LLC in May of 2005, John co-managed the information

technology practice area and opened the Southern California office for SVB Alliant, the former investment banking

division of Silicon Valley Bank. John is a 20+ year technology industry veteran with a unique blend of investment

banking, strategy consulting, corporate development and start-up experience. At Iomega, John was responsible for

strategic planning, M&A and new investment activities. Before Iomega, John handled public and private sell-side

transactions at Broadview International LLC and focused on enabling broadband technologies, digital networked

appliances, information security, semiconductors and storage systems. Prior to Broadview, John was director of

development at Compaq where he managed strategy projects covering broadband communications, the digital

networked home, Internet services, and corporate. At Compaq, he was also active in M&A including the Tandem

Computer and Digital Equipment Corporation mergers. John spent the first part of his career at an aerospace and

defense management consulting start-up that was acquired by Electronic Data Systems. John earned a B.S. in

Finance and Accounting from Babson College.

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Team Profiles

Christine Rotchford, Principal

Christine joined SASI in October, 2005 with over 13 years of market and competitive research experience

covering a broad range of IT areas such as information security, enterprise software and personal computing.

Prior to joining SASI, Christine was head of market research and competitive intelligence at Sonicwall, a

leading provider of security solutions to small and medium businesses. She also spent two years at Ensim, a

leading provider of hosting automation software. Prior to Ensim, Christine spent seven years in a variety of

market research roles. She spent two years at Compaq Computer Corporation in market intelligence with a

focus on competitive intelligence, market segmentation and sizing, and trend and database analysis. Christine

started her career at Management Ventures, a market research based consulting firm specializing in the

Consumer Packaged Goods Industry. She led all phases of primary and secondary research engagements at

Management Ventures. Christine has a B.S. in Finance from Babson College.

John Mascarenas, Senior Advisor

John’s career has covered a broad expanse of the high tech industry over the last 33+ years.

Currently John provides Strategic Advisory Services for equity, business development and mergers

& acquisitions to corporations such as Toshiba America Electronics Corporation, SanDisk as well

as startups. He was formerly with SanDisk Ventures as a Sr. Director/Consultant for strategic

equity and M&A as well as Sr. Investment Director with Intel Capital. John helps direct equity

and M&A activities in support of corporations’ strategic equity investment and acquisition

objectives. John's current market focus segments include both Enterprise and Consumer covering

Compute Storage, Data Management, Mobile, Flash, Networking. Previous sectors he has

directed investments in have included mobile & wireless, display technologies, MEMs, network

processing semiconductors, networking infrastructure, digital imaging, embedded

communications, software/hardware, handheld devices and software applications. John was with

Intel Corp since 1980 and with Intel Capital since 1998 where he was directly involved in over

70+ private equity and M&A transactions with a total value of $1B+. Prior to Intel Capital, he held

senior level positions at several Intel business units where his roles included strategic business

alliances, sales, marketing, product service and engineering.

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Team Profiles

Alex Barnes, Associate

Alex joined SASI in May, 2007 and has played a key role in BidStork’s sale to Sabre Holdings and Adaptec’s

divestiture of the Snap Server NAS business to Overland Storage. Alex also manages our 409A valuation

practice area. Prior to joining SASI, Alex interned at Yorkville Advisors, a private equity fund and leading

financier in the small-cap sector. His responsibilities consisted of researching potential portfolio companies

and providing transaction support. Prior to interning at Yorkville Advisors, Alex worked in operations

management at the San Diego Union Tribune. Alex holds a B.A. in Economics from the University of San

Diego.

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Appendix:

2014 M&A Transactions

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2014 IT Security M&A Transactions


Date Announced Buyer Seller Seller Description Ent. Value

($M)

EV/ Rev

12/9/2014 Belden Inc. Tripwire advanced threat, security and compliance solutions $710 4.8

12/1/2014 Intel Corporation PasswordBox identity manager that does not require one to type in, or even memorize passwords $55

11/24/2014 Acculynk PayPlum LLC (IP assets) safeguarding the acceptance and transport of sensitive payment card data within the online and mobile channels

11/24/2014 Datablink BRToken User Authentication

11/13/2014 Microsoft Aorato Directory Services Application Firewall (DAF™) by automatically learning, profiling and predicting entity behavior

11/6/2014 AVG Technologies Norman Safeground anti-virus, anti-spam, anti-spyware for consumers and SME vs Norman Shark (enterprise business) $14

10/31/2014 Garnero Group Acq. WISeKey SA information security and identity management software/services for the global growth of electronic transactions $120 44.5

10/28/2014 CA Technologies Identropy (SCUID assets) Identity Management initiatives.

10/28/2014 Cigital Inc. iViZ Security cloud-based penetration testing service for web applications

10/21/2014 BitSight Technologies AnubisNetworks key Security Email platforms

10/21/2014 Good Technology Macheen mobile cloud application service provider $8

10/20/2014 Citrix Systems Inc. RightSignature LLC software-as-a-service that allows users to sign documents online $38 5.4

10/16/2014 DocMagic, Inc. eSignSystems [Wave Systems) helping the enterprise manage their business processes and transactions entirely online $1

10/16/2014 Verdasys/Dig Guardian Armor5 secure mobile access to enterprise data and applications

10/7/2014 Sophos Plc Mojave Networks cloud-based approach to mobile security for enterprises that detects advanced threats and protects company data

10/1/2014 Pulse Secure LLC MobileSpaces offers a BYOD policy-managed workspace that protects mobile enterprise apps and data against loss and leakage $100 50.0

9/30/2014 GMO GlobalSign Inc. Ubisecure Solutions Inc. IAM Platform

9/15/2014 Tern plc Cryptosoft Ltd. Encryption for cloud and IoT applications

9/5/2014 Cryptzone AB HiSoftware Inc. offers a BYOD policy-managed workspace that protects mobile enterprise apps and data against loss and leakage

9/4/2014 LogMeIn Inc BBA Inc. [dba Meldium] make it simple and safe for companies and teams of all sizes to use modern web applications $11

9/3/2014 AVG Technologies Location Labs mobile safety and security subscription services sold in partnership with Verizon, AT&T, Sprint, T-Mobile, ... $140 4.2

9/2/2014 Kofax Limited Softpro GmbH electronic signature and signature verification software $31

9/2/2014 Veritas Capital BeyondTrust Software Inc. authorization management, access control and security solutions for virtualization and cloud environments $310 3.1

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2014 IT Security M&A Transactions (cont.)



($M)

EV/ Rev

8/29/2014 Morpho Dictao digital Security for on-line transactions

8/26/2014 Automattic Inc. Parka LLC [dba BruteProtect] Brute Force attack prevention plugin. We leverage the millions of WordPress sites to identify and block malicious Ips

8/25/2014 PS&C Limited Pure Hacking Pty. Ltd. Dedicated penetration testing services focusing on network application and Internet security $8 8.0

8/18/2014 YPB Group Ltd. Brand Reporter anti counterfeit application

8/15/2014 Yahoo! Inc. ClarityRay helps publishers and networks identify and prevent ad-fraud

8/12/2014 Kaseya Intntl Scorpion Software Corp. offering integrated two factor authentication, single sign on and password management solutions $20 5.0

8/12/2014 Thoma Bravo LLC SailPoint Technologies integrates role management, access request management, and compliance management solutions $300 5.0

8/11/2014 IBM Corporation Lighthouse Security Group Cloud Security services

8/8/2014 Gemalto NV SafeNet, Inc. [Vector Capital] security related tools including encryption technologies, hardware, software, and chips $890

8/7/2014 Facebook PrivateCore enables private computing in the cloud by validating and securing OpenStack servers

7/31/2014 IBM Corporation CrossIdeas s.r.l created IDEAS, Identity and Access Governance Solution

7/31/2014 Twitter Inc. Mitro Labs [fka Lectorius] Password security manager

7/29/2014 BlackBerry Ltd. Secusmart GmbH secure communications $82

7/21/2014 ACI Worldwide, Inc. Retail Decisions plc specialist payment fraud prevention provider $205 4.0

7/8/2014 RSA Security/EMC Symplified Inc. (IP assets) Identity-as-a-Service for the hybrid cloud

6/18/2014 CloudFlare Inc. CryptoSeal Virtual Private Networks (VPNs) as a service.

6/12/2014 CloudLock, Inc. Innovode Ltd. (assets) Cloud information security

6/11/2014 Insight Venture FireMon, LLC advanced network security management solutions for enterprises and managed service providers

6/3/2014 Cloudera Gazzang, Inc. help enterprises protect sensitive information and maintain performance in big data and cloud environments

5/27/2014 VASCO Data Security Risk IDS, Ltd. risk-based authentication solutions for global banking industry

5/22/2014 Thales Group SA Alcatel-Lucent (cyber assets) Network and telecommunications security solutions

5/21/2014 Cisco Systems Inc. ThreatGRID, Inc. dynamic malware analysis and threat intelligence technology, both on-premise and in the cloud, $55

5/21/2014 LANDesk Software LetMobile gateway-based, device agnostic, security solutions for enterprise mobility. $15 15.0

5/20/2014 Proofpoint Inc. NetCitadel Inc. threat management platform $24 24.0

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2014 IT Security M&A Transactions (cont.)



($M)

EV/ Rev

5/20/2014 Google Divide BYOD solution for corporate environments $120

5/15/2014 Hortonworks Inc. XA Secure comprehensive security and governance layer over big data infrastructure tools such as Hadoop $5

5/14/2014 Good Technology Fixmo (US/Sentinel assets) mobile risk management (MRM) $18

5/9/2014 General Electric Wurldtech protecting critical infrastructure from cyber attack

5/2/2014 NCC Group FortConsult A/S security testing services provider $3

5/1/2014 Clearlake Capital Lumension endpoint management and security platform

4/24/2014 GB Group PLC DecTech Solutions Pty Ltd fraud detection and prevention solutions across multiple languages, clients and geographies $18 3.6

4/23/2014 IntraLinks Holdings docTrackr Inc. documents safe and secure, wherever they're stored, whomever they're shared with $10

4/21/2014 Total Defense Inc Untangle, Inc. [fka Metavize] multi-function firewall and Internet management applications that are optimized for smaller organizations

4/7/2014 INSIDE Secure Metaforic protection against attack, for embedded, server and mobile security $12

3/31/2014 Regenersis PLC Blancco Oy Ltd. data erasure and computer reuse solutions $83 4.9

3/26/2014 Kudelski Group SA Conax AS content protection for digital TV services over broadcast, broadband and connected devices. $226

3/24/2014 Palo Alto Networks Cyvera Ltd. cyber-defense products that prevent remote attacks on Microsoft-based servers and end-points $191

3/21/2014 Ping Identity Corp accells technologies single service for authentication and identification on your mobile device

3/18/2014 Trustwave Holdings Cenzic, Inc. application security testing for enterprise software and tools to find application vulnerabilities

3/12/2014 Lockheed Martin Industrial Defender, Inc. cyber security solutions for control systems in oil and gas, utility and chemical industries

3/11/2014 IDMWORKS, Inc. IdentityForge, LLC identity and access management software solutions for mainframe, midrange, and legacy systems

2/24/2014 CloudFlare Inc. StopTheHacker, Inc. malware detection and web security.

2/23/2014 Good Technology BoxTone Mobile Service Management $100 5.1

2/21/2014 Google Inc. Spider.io anti-malware company for online advertisers

2/16/2014 Google Inc. SlickLogin simplest login experience for you using your smartphone

2/13/2014 Bit9, Inc. Carbon Black Computer security services provider

2/10/2014 HID Global Lumidigm biometric identity management solutions for point-of-sale (POS), civil ID and portable electronic device applications

2/10/2014 Sophos Plc Cyberoam Technologies Unified Threat Management (UTM), next-generation firewall and network security $80 2.3

2/6/2014 Imperva, Inc. Skyfence Networks Ltd. security and compliance of cloud applications $60

2/6/2014 Imperva, Inc. Tomium Software, LLC real-time mainframe security auditing agents (assets) $8

1/17/2014 ASSA ABLOY AB IdenTrust digital identity authentication solutions

1/17/2014 Vadium Technology Vadium Technology digital security and privacy solutions

1/15/2014 CipherCloud CloudUp Networks Security start-up that enables enterprises and government organizations to use SaaS services with confidence

1/15/2014 Google Inc. Impermium identifying fraudulent registrations, compromised logins, and risky transactions

1/6/2014 Palo Alto Networks Morta Security counter advanced cyber threats. $10

1/2/2014 FireEye, Inc. MANDIANT Corporation incident response and computer forensics solutions and services. $989 9.7

Sasi it security market overview 3 15

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