Cyber unicorn Checkmarx hits the market with $2.5 billion price tag
Cyber unicorn Checkmarx hits the market with $2.5 billion price tag
Four and a half years after acquiring the Israeli cyber firm, Hellman & Friedman is looking to make its exit.
Four and a half years after acquiring Checkmarx, the American investment fund Hellman & Friedman is initiating the sale of the Israeli cybersecurity unicorn, a leading player in application security solutions.
Calcalist has learned that in recent weeks, Hellman & Friedman executives have met with several investment banks to choose one to lead the sale process. The frontrunner is Citibank Israel, likely selected due to its close ties as a major client of Checkmarx.
Hellman & Friedman aims to sell Checkmarx for at least $2.5 billion, after purchasing the company in March 2020 for $1.2 billion, primarily from the American venture capital fund Insight Partners. Since the acquisition, Checkmarx’s revenues have doubled, although there was a slight decline in 2023.
Founded in 2006 by CEO Emmanuel Benzaquen and CTO Maty Siman, Checkmarx employs approximately 900 people across 70 countries, with about half of its workforce based in Israel. In late 2022, the company laid off around 10% of its employees. Headquartered in Ramat Gan, Checkmarx develops application security technology, focusing on automated code scanning to identify security vulnerabilities during the development process and ensure compliance with organizational security requirements.
Since its inception, Checkmarx has raised only $100 million, with Insight Partners investing $85 million in 2015, making it the company’s largest shareholder before the sale to Hellman & Friedman. Prior to the acquisition, Insight had considered taking Checkmarx public but ultimately chose to keep it private.
Hellman & Friedman currently holds 90% of Checkmarx’s shares, with the remaining equity owned by the company's employees and founders. It is unclear whether the employees and founders will sell their shares in the upcoming deal. Both founders continue to serve on the board of directors.
Checkmarx’s client base includes major global companies across various sectors, such as Dell, Adidas, Ford, Visa, Siemens, and Salesforce. Notably, Salesforce recently acquired another Israeli company, Own, for approximately $2 billion.
Hellman & Friedman, a private equity firm based in New York and San Francisco, was founded in 1984 by Warren Hellman and Tully Friedman. The firm specializes in investing in technology, medical devices, retail, and financial services. To date, it has invested in over 100 companies and manages assets totaling $115 billion.
The potential sale of Checkmarx comes during a challenging period, given that the company operates primarily from Israel. The ongoing Gaza war adds complexity to the timing of the sale. However, the original acquisition by Hellman & Friedman also occurred under difficult circumstances—during the onset of the COVID-19 pandemic. Most of the negotiations for that deal were conducted remotely via Zoom, amid concerns that the global crisis could derail the transaction.
As mentioned, at the end of 2022, Checkmarx laid off approximately 100 employees, 40 of whom were based in Israel. The layoffs were attributed to inflation and rising interest rates, which have created challenges for many companies. In response, Checkmarx implemented a plan to reprioritize its spending and refocus its activities.
