Forescout Technologies is seeking a potential buyer, and multiple private equity firms are giving the cybersecurity firm's business a look for potential acquisition, MSSP Alert has confirmed with four sources.
Chatter about Forescout's ownership status emerged among private equity sources attending last week's Cisco Partner Summit 2019 in Las Vegas.
Forescout's platform provides device visibility -- allowing partners and customers to oversee device inventory, compliance enforcement, policy-based access control and rapid response to security incidents, the company asserts.
Forescout has partnerships with such MSSP-friendly technology businesses as Digital Defense (a security assessment solutions provider); Carbon Black (now owned by VMware); and CrowdStrike.
Forescout Seeks Buyer: Financial Background
Forescout announced weaker-than-expected 3Q 2019 financial results on November 6. Total revenue was $91.6 million, up 7 percent from the third quarter of 2018. The company had a $33.5 million net loss for the quarter, compared to $8.3 million in the corresponding quarter for 2018.
Although the revenue results beat analyst expectations, earnings were a bit short of Wall Street's targets. In a prepared statement about the results, Forescout CEO and President Michael DeCesare said on November 6, 2019:
“Our third quarter 2019 results were impacted by extended sales cycles, with the resulting revenue shortfall most pronounced in EMEA. These results are disappointing to us and we are taking a number of steps to improve things we can control, including sales execution and shaping our revenue model for better predictability. We continue to be confident that we are in the early innings of a large market opportunity for device visibility and control and that Forescout is well-positioned to win. To that end, we are excited to announce eyeSegment, a major innovation for the company and our first cloud-delivered SaaS product that will help customers accelerate network segmentation.”
Activist investor Corvex Management and its partner, Jericho Capital Asset Management, disclosed a combined 14.5% in ForeScout in October 2019 and said they planned to push for changes at the company, Bloomberg notes.
Forescout for Sale: Potential Buyers?
Forescout's stock rose about 7 percent on November 11 as speculation about the company's ownership status spilled into public markets.
The company, valued at about $1.56 billion, has hired a financial advisor to explore strategic options including a possible company sale, Bloomberg reports. A final decision on pursuing a sale hasn’t been made and the company could decide to remain independent, the report indicates.
Potential buyers include a range of private equity firms -- several of which have been watching Forescout closely since October 2019, sources tell MSSP Alert.
Forescout has not commented about the ownership status speculation.
