RBC Contemplates Possible Bidders for $IMPV

IMPV is way up this morning, following a Bloomberg report which stated there were multiple bidders for the company and that a deal was imminent.

RBC notes Bloomberg is reporting that there could be several bidders for Imperva including CSCO, IBM and Forcepoint, which is backed by RTN and Vista Equity Partners. Each could make some sense to us as Cisco has a strategy to build out a larger security presence, IBM is the most direct competitor with Guardium and Forcepoint has been active in M&A recently with last year’s acquisition of Websense. As a reminder, the average EV/S multiple for strategic software deals is 4.4x while the average EV/S multiple for a company with 70%+ GMs (Imperva is just shy of 80%) by a strategic bidder is 6.5x. Maintain Outperform and $52 price target that reflects 4.5x EV/S on their FY/17 estimates.

If they did catch a bid, I’d expect shares of FEYE and SPLK to move higher in sympathy.