Israeli cybersecurity company Check Point Software Technologies Ltd. (Nasdaq: CHKP) has signed a definitive agreement to acquire Israeli cybersecurity company Perimeter 81 for $490 million, on a cash free, debt free basis. The deal is due to be completed in the current quarter.
Perimeter 81 was founded in 2018 and has over 200 employees and more than 3,000 customers worldwide. The company provides a cloud and network security company that develops secure remote networks, based on the zero trust architecture, for organizations.
The importance of the field in which Perimeter 81 operates grew rapidly during the shift to remote work and the swift transition to the cloud. Due to this Perimeter 81 completed a finance round in June 2022 in which it raised $100 million in which it became a unicorn at a company valuation of $1 billion, after money. Check Point is now only paying $490 million, although this done not include the company's cash and debts.
Even so this is still a substantial fall in value for Perimeter 81 from last year. The 2022 financing round was led by B Capital with the participation of Insight Partners, Toba Ventures, Entrée Capital, ION Crossover Ventures and Spring Ventures and brought to $165 million the total amount raised by Perimeter 81.
Permieter 81's valuation rose rapidly in recent years and was known, among other reasons, due to reports to the Tel Aviv Stock Exchange by Aviv Refuah's Spring Ventures, which led the cybersecurity company's first financing round. Between 2020 and 2022, the company's valuation rose from $160 million to $1 billion, after money but has now slipped to $490 million. As of the end of 2022, Spring Ventures held a 5.8% stake in Perimeter 81, which was recorded as worth NIS 141 million.
Spring Ventures will now receive $25.5 million for its shares and a sales grant of $800,000 from Perimeter 81. Spring said, "The proceeds from the sale transaction reflect a decline of approximately $14.5 million dollars compared with the fair value of the company's holdings in its financial statements for 2022." In total, Spring invested $3 million in Perimeter 81, and together with previous realizations, the cumulative return from its investment will be $28.5 million.
Check Point CEO Gil Shwed said, "With the advent of hybrid work and the rise of cloud transformation, the demand for security services that expand beyond the network perimeter is increasing. By leveraging Perimeter 81’s capabilities and integrating them into the Check Point Infinity platform we continue with our vision to deliver the best security through comprehensive, collaborative and consolidated solutions."
Perimeter 81 CEO Amir Bareket added, "This strategic move marks an exciting period for our company, partners, and customers. By joining Check Point, a global leader in cyber security for over 30 years, we aim to deliver the premier SASE platform in the market. Our interconnection represents a significant step towards a comprehensive and scalable security for the modern era. We look forward to the positive impact we will jointly create."
Published by Globes, Israel business news - en.globes.co.il - on August 10, 2023.
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