Optiv Security: For Sale or IPO?

Optiv Security could be up for sale or may even pursue an IPO (initial public offering), according to Reuters. Optiv, owned by KKR,  positions itself as “the cyber advisory and solutions leader” — and also ranks as a Top 250 MSSP.

Among the takeaways from the Reuters report:

  • Optiv’s valuation is more than $3 billion including debt.
  • Optiv’s annual revenue is roughly $650 million, which generates cash flow of about $150 million.

Neither KKR nor Optiv commented in the Reuters report.

Side note: MSSP Alert thinks Reuters’ revenue estimate for Optiv might be a bit low, since the company generated more than $972.6 million of revenue on a pro forma basis in 2015, according to a ChannelE2E report in 2016.

Optiv Security: Current and Future Owners?

KKR acquired Optiv from Blackstone and other investors for about $1.8  billion or $1.9 billion in 2016. The valuation multiple at the time was roughly 11 times to 13 times annual EBITDA, ChannelE2E reported in 2016.

Potential suitors for KKR could include a lengthy list of private equity firms that are acquiring MSSPs and cybersecurity consulting firms.

Noteworthy buyers and well-funded investors in the MSSP market include Apax Partners, M/C Partners, Morgan Stanley, HQ Equita/HQ Capital, and Trinity Hunt Partners, among many others, both MSSP Alert and ChannelE2E have previously reported.

Big Private Equity Understands MSPs, MSSPs and Cybersecurity

Meanwhile, larger private equity firms such as Thoma Bravo and Vista Equity Partners are very familiar with MSP- and MSSP-centric business models, though most of Optiv’s revenues come from more traditional security consulting and project work, ChannelE2E and MSSP Alert believe.

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