BANGALORE: Private equity corporate colossus, Carlyle Group from its barrio is all set to sell network security provider Cyberoam Technologies to British American Company Sophos in an agreement estimated at about $70 million, or roughly Rs 430 crore, which signals mounting M&A interest in Indian IT products space.
Carlyle has possession of bulk of the shares in Cyberoam, which was spun out of Ahmadabad-based IT Product Company Elitecore Technologies, which endures to hold minority interest in the network security provider.
Cyberoam affords network security solutions to physical and virtual networks of organizations and trades with its next-gen firewalls and threat management appliances.
Last November, Cyberoam Threat Research Lab found a critical susceptibility in Facebook’s OAuth process (Authorizing third party access to user credentials and their servers), with a potential to cause trouble at the click of a malicious link. Facebook acknowledged and the “fix was pushed to production“.
Sophos is a developer and vendor of security software and hardware, offering unified threat management products. The company, co-headquartered in Oxfordshire and Massachusetts, is owned by private equity major Apax Partners, which acquired it for more than $700 million three years back.
Ever since, Sophos has stepped up M&A action to grow bigger, snapping up network security solutions and mobile management firms like Astaro and Dialogs. “Sophos is an active buyer that is continuously exploring acquisition opportunities. However, it is our policy to not comment on rumours or speculation,” Dave De Jear, a Sophos spokesperson alleged.
A Carlyle spokesperson however could not be contacted for comments right away.
The forthcoming contract, which may possibly be signed next week, will see Carlyle departing with handsome five-fold gain after financing $10 million into Elitecore, and Cyberoam.
Cyberoam has more than 450 employees with offices across US, Middle East and India. It’s R&D and global support management centre also maneuvers out of India.
There’s a rising buyout interest in India-born IT products corporations, which in the past has struggled with poor M&A record. The Indian software products landscape got a booster shot with Oracle obtaining I-Flex in a $1-billion deal, setting the stage for scripting an efficacious product Saga in the country.
The ecosystem from its quarter has benefited from a new wave of indigenous software product companies like Inmobi, followed by Zoho, Quickheal and Pubmatic expecting to hit a billion dollar estimates almost immediately.