US private equity firm Hellman & Friedman has bought control of Israel cybersecurity company Checkmarx from Insight Partners in a cash deal at a valuation of $1.15 billion, sources inform "Globes".
Checkmarx was founded in 2006 and led since by CEO Emmanuel Benzaquen and Maty Siman, CTO. It employs more than 700 employees, about half of them in Israel. Its headquarters and development center are both in Ramat Gan. It has over 1,400 customers in 70 countries. The company deals in Application Security Testing. Its solutions are designed to identify and fix security weaknesses in source code and to block security chinks in web and mobile applications.
Insight Partners will continue to own a substantial minority interest in Checkmarx. According to the companies' announcement, the deal represents the largest acquisition of an application security company to date.
Since it was founded, Checkmarx has raised some $100 million, of which $85 million was invested by Insight Partners, which bought the company at a valuation of $120 million in 2015, and is the main beneficiary of the sale to Hellman & Friedman, with a stake of 70% before the deal announced today. Industry sources say that Checkmarx's employees own about 10% of the company.
"This acquisition is a clear testament to Checkmarx’s inimitable global team who have ensured our leadership position in software security, as well as to the significant role our technology plays in the broader cybersecurity industry," Benzaquen said. "With more corporations leveraging software development to scale their businesses than ever before, executives are acutely aware of the increased risks caused by software exposure. More than 40 of the Fortune 100 have turned to Checkmarx to mitigate risk, secure code, and embed security into every aspect of their software development. We are thrilled to partner with H&F in our journey that takes our ‘software equals security’ vision to the next level."
According to Benzaquen, Checkmarx will continued to be run independently, as it did when it was controlled by Insight Partners.
In 2017, it was reported that Checkmarx was readying for an IPO, but in the end the move did not go ahead.
Checkmarx was represented in the deal by Advs. Yair Geva, Tomer Farkash and Miri Wang, of Herzog Fox & Neeman Law Office.
Published by Globes, Israel business news - en.globes.co.il - on March 16, 2020
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