Proofpoint has agreed to buy InteliSecure, a data loss protection services provider, in a cash deal worth $62.5 million. Shares of the cybersecurity and compliance company declined almost 4.7% to close at $132.55 on Feb. 22.
Proofpoint (PFPT) expects the deal to boost the company’s revenue range by $10 million for 2021. The company’s adjusted net income range for the year is estimated to fall by $5 million, after taking account of integration costs, accounting, and other transaction-related adjustments. Proofpoint expects the deal to close this March.
Proofpoint CEO Gary Steele commented, “The acquisition of InteliSecure will support our ability to collectively help our customers and partners with people-centric managed security services that leverage the technology and deep expertise of InteliSecure applied across Proofpoint’s market leading security and compliance platforms.”
The acquisition of InteliSecure will increase the company’s employee base by 150 individuals. (See Proofpoint stock analysis on TipRanks)
Following the deal announcement, Robert W. Baird analyst Jonathan Ruykhaver reiterated a Buy rating on the stock with a price target of $155 (16.9% upside potential). The analyst said, “While we do not expect this acquisition to be a meaningful driver of growth for Proofpoint, the deal does appear to be a nice way to bolster Proofpoint’s information protection portfolio and its ability to drive customer success and support channel partners there.”
The consensus rating among analysts is a Strong Buy based on 8 Buys and 2 Holds. The average analyst price target stands at $150.90 and implies upside potential of almost 14% to current levels. Shares have increased more than 36% over the past three months.
Proofpoint scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.