(News Bulletin 247) – The group will add capacities and new professions in cybersecurity via this operation.

While Thales previously had views on the cybersecurity activity of Atos, it is finally towards an American group that the company sets its sights.

The technology and defense company announced on Tuesday the proposed acquisition of the company Imperva from the private equity fund Thomas Bravo, on the basis of an enterprise value of 3.6 billion dollars (more exactly 3.7 billion dollars from which are subtracted 100 million dollars of tax benefits).

This is the second major operation carried out by Thales in a few days, with the announcement of the acquisition, two weeks ago, of Cobham Aerospace Communications for 1.1 billion dollars.

“Imperva will strengthen the growth of Thales’s data security activities and enable the group’s entry into the buoyant application security market,” the company said in a statement.

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An inflated turnover in cybersecurity

With this takeover, Thales’s turnover in cybersecurity will increase to 2.4 billion euros (for the year 2024, including the activity of Thales, the takeover of Imperva but also that of the Australian Tesserent announced in June), compared to around 1.5 billion euros in 2022.

Present in 180 countries and with more than 1,400 employees, Imperva generated revenues of $500 million in 2022. Its headquarters are based in California and the American company presents a double-digit growth in its revenues as well as an operating margin of around 20% expected by 2027, while that of Thales reached 11% in 2022. The group specifies that the financial profile of Imperva is “in line” with that of its cybersecurity activities.

“This acquisition will have an immediate impact on the growth and margin profile of Thales”, explained the company headed by Patrice Caine.

The merger of the cybersecurity activities of Thales and Imperva will create a player with a broad portfolio of cybersecurity products and solutions, built around three types of products: identity, data security, and application security, this third business being therefore brought by Imperva to Thales.

This operation “will complement Thales’s DIS (identity and digital security, editor’s note) division by strengthening data security and adding capabilities in the field of application security, which is the fastest growing segment of Thales’s addressable market in the field of civil cybersecurity”, notes the bank Jefferies.

Synergies of $110 million per year

The group estimates that the complementarities made possible by this external growth operation will generate cost synergies of $50 million per year at cruising speed and achieve synergies of $60 million per year in terms of revenues. The timetable for achieving these synergies has not been specified.

Based on this acquisition, Thales has communicated new prospects for its DIS division, namely like-for-like growth of 6% to 7% per year over the period 2024-2027 to reach revenues between 5.4 billion euros and 5.5 billion euros in 2027 and an operating margin of 16.5% in 2027.

The company also intends to consolidate all cybersecurity activities within DIS, while this division currently only includes part of them, the rest being located in its Defense division.

Regarding the price of this acquisition, the enterprise value of 3.6 billion dollars corresponds to a multiple of 6.1 times the turnover expected in 2024, “in line with previous transactions and the valuation multiples applicable to comparable companies in cybersecurity”, assures Thales. It also corresponds to a multiple of 17 times the expected operating profit in 2024 post-synergies and 13 times that of 2027 post-synergies.

The French group indicated that the operation did not call into question its capital allocation policy, which it thus confirmed with a dividend distribution rate of 40%, in line with previous years, and the continuation of its current share buyback program.

In addition, the company expects the operation to have a “significant” “accelerative” (therefore positive) effect on its net earnings per share in the medium term. Which, considers Jefferies, implies “a certain dilution in the first phases, taking into account the additional interest (on new debt raised to finance the acquisition, editor’s note), which we estimate at 115 million euros for Thales, on the basis of an interest rate of 3.5% “.

Thales expects to finalize the operation in early 2024.