Even more M&A activity is emanating from the security industry. Check Point, the enterprise cybersecurity company has recently acquired Perimeter 81 to enhance its tools for remote and hybrid employees. Check Point will pay approximately $490 million for the Israeli startup on a “cash-free, debt-free” basis, according to a statement released today.
The acquisition coincides with a severe funding shortage for businesses, especially those seeking to raise larger growth rounds. According to PitchBook data, Perimeter 81 is exiting at a significant discount to its last valuation: it raised $100 million in June 2022 at a valuation of $1 billion. Its investors included, among others, Insight Partners, Maverick Ventures Israel, and Francisco Partners.
Check Point, which has origins in Israel but is now headquartered in San Carlos, California, is publicly traded and has a market capitalization of over $15 billion at present.
Perimeter 81 has approximately 3,000 clients worldwide. This transaction will help Check Point eliminate a direct competitor, acquire more tools to expand its offerings and attract more customers.
Check Point has made a name for itself as a specialist in the various facets of enterprise cybersecurity, with product lines spanning the various ways in which a business may interact with cloud services, network security enabled by AI and predictive techniques, and proactive threat detection.
It also has a product line geared toward remote and hybrid employees, and it appears that Perimeter 81’s technology will be used to strengthen that business.
It focuses on “security service edge” services, secure access for employees who use company sites, cloud services, data centers, and the internet in general.
Companies like Zoom — ironically, given how much of its business is in the remote worker market — have made it a point to ask more of their employees to spend more time in the office on a regular basis, and while we have significantly fewer people working from home now than we did during the Covid-19 pandemic years, there are still a significant number of those opting to work from home at least part of the time.
According to estimates, 12.7% of full-time workers in the United States operate from home. The percentage of employees who split their time between the office and their homes is 28.2%.
This presents a substantial market opportunity for businesses that develop services to cater to this population and this now-common aspect of work life.
Check Point has announced that it will integrate Perimeter 81 into its Infinity architecture as part of its strategy to develop more unified security services for network, cloud, and remote users and utilization.
Importantly, this transaction is consistent with a larger trend we’ve been observing in which larger enterprise platforms, in security and other product areas, have been consolidating point-solution functionality to provide customers with “one-stop-shop” solutions.
This not only creates additional revenue opportunities for Check Point, but it may also help customers simplify their IT contracts. (This was part of the reasoning behind Rubrik’s acquisition of Israeli cybersecurity startup Laminar for between $100 and $200 million, which was announced earlier this week.)
The demand for security services that extend beyond the network perimeter is growing, according to Gil Shwed, CEO of Check Point Software Technologies. “By leveraging Perimeter 81’s capabilities and integrating them into the Check Point Infinity platform, we continue our mission to provide the highest level of security via comprehensive, collaborative, and consolidated solutions.”
This strategic decision ushered in an exciting time for our company, our partners, and our clients. Perimeter 81’s CEO, Amit Bareket, added, “By affiliating with Check Point, a global leader in cyber security for over three decades, we intend to deliver the industry’s premier SASE platform.
Our interconnection is a significant step toward a comprehensive and scalable security system for the twenty-first century. We anticipate the positive impact we will have together.
The anticipated closing date is the third quarter of this year.