Cyber Buyout: Veracode Acquired by CA Technologies for $614M
In one of the biggest tech acquisitions of the year to date, Veracode is getting bought by CA Technologies for $614 million in cash. The deal is expected to close next month.
Veracode had raised more than $100 million in venture funding from investors that include .406 Ventures, Atlas Venture (which became Accomplice), StarVest Partners, Polaris Partners, Symantec, Meritech Capital Partners, and Wellington Management. It’s hard to say how good an outcome the acquisition is for investors and employees, but $614 million should give at least some of the shareholders a healthy slice.
Burlington, MA-based Veracode specializes in application security and testing for both small and big companies. That process entails scanning applications throughout their development lifecycle, and keeping tabs on the whole software supply chain of an organization (involving multiple vendors and versions of code).
“By joining forces with CA Technologies, we will continue to better address growing security concerns, and enable [customers] to accelerate delivery of secure software applications that can create new business value,” said Veracode CEO Bob Brennan in a prepared statement.
New York-based CA Technologies (NASDAQ: CA) said it expects the acquisition to “add two to three percentage points of revenue” in the coming year, bringing its total revenue to between $4.06 billion and $4.14 billion. (My rough math says, then, that Veracode’s annual revenue is in the ballpark of $100 million, maybe just under.)
There have been several other recent Boston-area tech buyouts: Salesforce acquiring Demandware for $2.8 billion, Oracle buying Dyn for a rumored $600 million-plus, and Hewlett Packard Enterprise acquiring SimpliVity for $650 million.
Veracode got started in 2006 and has grown to more than 500 employees worldwide. (Its other office is in London.) The company was considered a strong IPO candidate for the past year or two, but the window for tech IPOs never really opened. In the end, it’s not surprising that Veracode was taken off the market by a bigger player in need of boosting its software-security infrastructure.