Except for losing its ticker, we don’t expect the soon-to-be private SonicWALL (SNWL) to be radically different from the one that traded on the Nasdaq. At least not the SonicWALL of the past few years. The reason? The unified threat management vendor has already been running a strategy that’s found fairly often in PE portfolios.
Basically, the company has taken the cash it has generated from its rather mature core product (firewalls) and done acquisitions to expand into emerging markets. SonicWALL has inked about a deal each year for the past half-decade, buying startups that had developed technology for anti-spam, continuous data protection and, most recently, WAN traffic optimization.
The collective bill on those deals is about $78m, a relatively small amount for a company that held more than $200m in its treasury and generated roughly $10m of cash each quarter. Once it goes private, we wonder if SonicWALL won’t start eying some larger deals. After all, it will have deep-pocketed new owners and will no longer be penalized in its accounting for acquisitions.
SonicWALL’s shopping trips
Source: The 451 M&A KnowledgeBase