Proofpoint CEO Sumit Dhawan will take over as head of the cybersecurity company in 2022, a year after the company was acquired by Thoma Bravo for $12.3 billion. He has been pushing the company to consider strategic opportunities, such as acquiring smaller cybersecurity companies, to boost the company’s market expansion and spur industry consolidation.
proof point
LONDON—Private cybersecurity company Proofpoint is exploring the use of external investors for pre-IPO financing and is considering acquiring smaller cyber companies with a view to returning to the public markets in 2026, Chief Executive Sumit Dhawan told CNBC.
“We are looking at exploring the public markets sometime in the next 12 to 18 months,” said Dhawan, who will take over as Proofpoint’s newly appointed CEO in 2022, a year after the company was acquired by private equity firm Thoma Bravo. official.
Dhawan added that the timing of Proofpoint’s IPO will still depend on overall market conditions and the outcome of the 2024 U.S. presidential election.
Since Proofpoint’s acquisition by Thoma Bravo in 2021 and Dhawan’s subsequent appointment as CEO, company management has pushed the company to consider strategic opportunities, such as acquiring smaller cybersecurity companies, to spur industry consolidation.
Dhawan noted that there are currently too many players in the cybersecurity market, and Proofpoint is currently looking for acquisition targets that can provide a “strategic fit” for the company – and at the right price.
“This happens in many other technology areas — infrastructure, application platforms — where you start building fewer vendors but richer platforms, and the result is consolidation,” Dhawan said in an exclusive interview told CNBC.
“Currently, there are about 2,000 nonprofit cybersecurity companies that are venture-backed, so obviously they are either going to be consolidated or they may not exist. No market can have that many players. So this is going to be Happen, it will happen.
Dhawan said he sees a “bid-ask spread” on cybersecurity opportunities in the current market, meaning target companies sell for more than the valuations they offer. But he added that he saw some “huge opportunities” in the market.
road from private to public
Founded in Silicon Valley in 2002, Proofpoint’s technology helps companies prevent phishing attempts and other cyberattacks across a range of platforms, including email, social media, mobile devices and the cloud.
Proofpoint went public in the United States in 2012 but later delisted after Thoma Bravo acquired the company. Transaction volume in 2021 was $12.3 billion.
Now, Proofpoint is once again looking to enter the public markets.
“We’re a little bit different than a typical IPO company,” Dhawan said. “They tend to be smaller. They tend to have a very different profile. They tend to have uncertainty around profitability, and they tend not to be easily integrated.”
Proofpoint’s listing does not mark the first time a company Thoma Bravo acquired through a private equity buyout has had a second IPO. In 2019, Thoma Bravo took cybersecurity company Dynatrace private in a 2014 acquisition and relisted it in New York.
Proofpoint will conduct “multiple rounds” of financing to expand ownership of the company by other private equity investors, Dhawan said, adding that private placements – selling shares to pre-selected investors rather than to the public – are One of them.
“We are about to start the process” of raising funds from investors other than private equity owners, Dhawan said. However, he stressed that the company has not officially started the process.
Proofpoint’s boss said he hopes what differentiates his company from other technology and cybersecurity companies pursuing a similar path to an IPO is a good balance of growth and profitability, double-digit growth and strong leadership in the market.
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