Oct. 21, 2015, 12:34 PM
- Several security tech plays, including ones that were tech sector darlings earlier this year as a torrent of hacking incidents led corporate cybersecurity spend to jump, are selling off on a quiet day for equities.
- Major decliners include Palo Alto Networks (PANW -4%), FireEye (FEYE -4.9%), Fortinet (FTNT -4.3%), CyberArk (CYBR -4.8%), Imperva (IMPV -5.3%), Proofpoint (PFPT -3.9%), Qualys (QLYS -2.8%), and Rapid7 (RPD -6.8%).
- No major news has arrived to trigger a selloff. Meanwhile, hacking-related stories have continued producing ink in recent weeks. Notable ones: China is reportedly continuing hacking attacks on U.S. firms in spite of a pact that banned government spying on companies; authorities are probing a potential Russian hack of Dow Jones; and ISIS has reportedly tried (without much success) to hack the U.S. electrical grid.
- The PureFunds ISE Cyber Security ETF (HACK -1.6%) is down 24% from a June peak of $33.91. YTD, it's only down modestly.
- Proofpoint reports earnings after the close, and Fortinet tomorrow afternoon. Qualys reports on Nov. 2, FireEye on Nov. 4,, CyberArk on Nov. 5,, and Rapid7 on Nov. 12,
- Update: One potential culprit: Server virtualization software leader VMware is cratering due to its soft Q4/2016 guidance (partly blamed on cloud adoption). A smattering of other high-beta enterprise tech names are also selling off.
Jul. 8, 2015, 1:41 PM
- Fortinet's (FTNT - unchanged) $44M ($1.63/share) acquisition of enterprise Wi-Fi hardware/software vendor Meru Networks (MERU - unchanged) is officially on the books. The deal was first announced on May 27.
- Meru will operate as a Fortinet subsidiary. Echoing prior remarks, Fortinet declares Meru will allow it to "deliver new solutions and services to help enterprises of all sizes deploy, manage, and secure wired and wireless networks in a mobile era."
- Shares are two days removed from getting hit by a Cowen downgrade to Underperform. Oppenheimer once more defended Fortinet yesterday. "Our bullish stance is driven by continued strength from high-end appliances, strength across all geographies and verticals notably within the Telco vertical, and Fortinet's Advanced Persistent Threat (APT) solution continues to see solid demand as APT remains prevalent."
May 27, 2015, 9:37 AM
- Fortinet (FTNT -1.4%) is acquiring Meru Networks (MERU +16%), a provider of enterprise Wi-Fi access points, controllers, and management software, for $44M in cash, or $1.63/share. The price represents a 17% premium to Meru's Tuesday close, and is equal to just 0.54x Meru's 2015 sales consensus of $81.3M.
- Fortinet, which already offers Wi-Fi access points and integrated Wi-Fi/security appliances, declares the deal "expands its opportunity to uniquely address the $5B global enterprise Wi-Fi market with integrated and intelligent secure wireless solutions." It also notes Meru's product line includes cloud/virtual Wi-Fi controllers (eliminates the need for dedicated hardware), and SDN-capable management and provisioning software.
- The deal is expected to close in Q3. Meru has been struggling to deal with competition from larger rivals such as Cisco and HP/Aruba Networks. The company announced a strategic review in January.
- Separately, Fortinet has launched FortiGuard Mobile, a subscription service that aims to protect phones/tablets from cyber threats, and which integrates with Fortinet's mainstay ForiGate unified threat management (UTM) appliances. Palo Alto Networks recently partnered with VMware to offer its own mobile security solutions.
Aug. 25, 2014, 9:21 AM
- Raymond James thinks H-P could acquire FireEye (NASDAQ:FEYE) or Fortinet (NASDAQ:FTNT) to expand its enterprise security position.
- Remarks made in H-P's FQ3 CC last week about the presence of "material non-public information" have fueled M&A speculation. UBS named Rackspace as a potential target on Friday, but re/code soon followed up by reporting H-P is still uninterested in the company. The enterprise security space has seen plenty of M&A activity over the last two years.
- SA Pro author David Hernandez offered a bullish take on FireEye on Friday, arguing (among other things) the company's threat-prevention platform is differentiated by a superior virtual sandbox for analyzing/executing potentially malicious code.
- FEYE +2.3%. FTNT unchanged for now.
Mar. 24, 2014, 6:25 PM
- Though Palo Alto Networks' (PANW -4.3%) $200M acquisition of endpoint security startup Cyvera might lower its 2014 EPS by 10% and 2015 EPS by 20%, it also stands to increase the company's addressable market by a quarter to ~$20B, thinks FBN's Shelby Seyrafi.
- "We view this acquisition as a logical expansion of the company’s end market that enhances its ability to provide end-to-end threat protection," says Baird's Jayson Noland. He notes Palo Alto's management plans to create an "overlay sales force" to sell endpoint security solutions.
- FBR's Daniel Ives sees the deal, the latest in a string of high-profile security acquisitions (I, II), as part of a "massive consolidation in the security landscape" set for 2014. He thinks Fortinet (FTNT), Proofpoint (PFPT), and Imperva (IMPV) could be among the companies snapped up this year by larger tech firms.
Jul. 23, 2013, 9:29 AM
Cisco (CSCO) appears to have two main goals with the Sourcefire (FIRE) acquisition: 1) To grow its exposure to the intrusion prevention system (IPS) space, which is growing rapidly as reports of major hacking incidents put governments and enterprises on edge. Sourcefire, the IPS market's leader, has been expected to grow 25% in 2013. Cisco's security sales fell 4% Y/Y last quarter. 2) To develop end-to-end security platforms that combine traditional firewall tools with more software-centric offerings providing application/service-level security and a deeper understanding of user activity. Palo Alto Networks (PANW - next-gen firewall leader) and Fortinet (FTNT - UTM hardware leader) are each addressing this trend in their own ways. (PR) (John Chambers' security "blank check")| Jul. 23, 2013, 9:29 AM
Jul. 23, 2013, 8:18 AM
Mar. 22, 2013, 9:26 AM
Fortinet (FTNT) is encroaching on F5's (FFIV) turf by acquiring Coyote Point Systems, a maker of application delivery controllers (ADCs) for SMBs. Fortinet claims Coyote Point's products, which (like F5's) rely on a proprietary OS, complement its core FortiGate unified threat management security hardware, as well as its firewall and denial-of-service appliances. The purchase comes as F5, which sells to enterprises and carriers in addition to SMBs, launches firewall hardware, as well as security modules for its ADCs.| Mar. 22, 2013, 9:26 AM
Jan. 14, 2013, 2:08 PMJohn Chambers recently said he gave Chris Young, the SVP in charge of Cisco's (CSCO) security ops, a "blank check" to hire and acquire as necessary over the next 2-3 years. Moreover, sources tell Reuters Cisco has been actively looking for security acquisitions. Chambers' motivation: while Cisco's security ops post modest growth, upstarts such as PANW, FTNT, and FIRE are growing much faster thanks to their focus on segments such as next-gen firewalls, UTM hardware, and IPS systems, products that offer deeper analysis of content/apps than traditional firewalls. | Jan. 14, 2013, 2:08 PM | 1 Comment
Jan. 11, 2013, 1:19 PMFortinet (FTNT -0.1%) has bought content delivery network (CDN) software startup XDN, XDN discloses on its blog. A Fortinet exec tells Light Reading XDN, whose software handles domain name requests and other Web traffic, was purchased to strengthen Fortinet's cloud security management offerings. He adds Fortinet envisions businesses adopting a "hybrid" security model that combines security hardware and cloud services over the long run. Rival Palo Alto Networks has also taken an interest in cloud security services. | Jan. 11, 2013, 1:19 PM
Aug. 15, 2012, 10:23 AMEMC COO David Goulder re-affirms his company's interest in buying security companies (previous). EMC, whose Q2 security software sales rose 13% Y/Y, has been looking to reduce its storage hardware exposure lately, as storage value-add increasingly shifts to software running on servers. Potential targets include richly-valued names such as Palo Alto Networks, Fortinet, and Sourcefire, and less costly vendors such as Vasco Data, IntraLinks, and Websense. | Aug. 15, 2012, 10:23 AM
Mar. 13, 2012, 1:24 PMNow that P-E firm Thoma Bravo has sold SonicWALL to Dell, it might turn its sights on acquiring Brocade (BRCD +1.9%), believes FBN's Shelby Seyrafi, who also thinks the deal will spell increased competition for Fortinet (FTNT). Brocade's buyout talks with Blackstone recently broke down. | Mar. 13, 2012, 1:24 PM