Monterro collects first round bids in Outpost24 auction

Monterro is advised by William Blair, these and two further sources familiar said. Carnegie also has an advisory role, one of the sources added.

First round bids were submitted in the second week of May, one of the sources said. Early marketing materials for Outpost24 came out in December last year, two of the sources said.

The business is being marketed off an annual recurring revenue figure between EUR 35m-40m, three of the sources said, with one adding that the business boasted 25% ARR growth in sale materials.

Valuation expectations range from EUR 300m to EUR 400m, three of the sources said, with one adding that this type of business usually goes for between 8x-12x revenue.

The current market climate could peg a more realistic sales multiple at around 7.5x, one source cautioned, with another source adding that EUR 400m sounds "aggressive".

The sellside is likely to have invited a broad buyer group to bid to achieve the valuation expectations, one of the sources said, adding that the sellside would need to include international buyers, as the business operates outside of Europe and in the US as well.

Outpost24's full stack threat protection offering, which is differentiated from its competitors, could help the asset reach a high valuation, one of the sources said.

Monterro bought a 75% stake in the company in 2016. In 2020, Outpost24 raised SEK 200m (EUR 20m) from lead investors Swedbank Robur and Alcur Fonder, with the proceeds funding international expansion.

At the time of the fundraise, North America accounted for about 20% of Outpost24's revenue and then-CEO Martin Henricson identified huge potential for growth given the scale of the market for cybersecurity assessment solutions, as reported in 2020 in an exclusive interview with Mergermarket.

Current Outpost24 CEO Karl Thedeen took up the role in April 2021.

Back in 2020, Mergermarket reported the company's European business accounted for c.70%-75% of revenue and was focused on the UK and France, followed by the Benelux region and the Nordics. The company had also entered Germany, where it identified considerable scope for expansion.

Recent acquisitions include Spanish threat intelligence provider Blueliv in June 2021 and Specops Software in November 2021, a Swedish provider of password management and user authentication solutions. The latter transaction also saw Swedbank Robur and Alcur Fonder inject a further SEK 50m (EUR 5m) in funding.

Founded in 2001, Outpost24 develops and provides vulnerability management technology and services. The company has around 300 employees and is headquartered in Karlskrona, Sweden, with eight additional offices across Europe and the US, as well as +90 resellers worldwide.

Over 2,500 commercial and government clients in more than 40 countries use Outpost24 to protect their internal and external networks.

Outpost24, Monterro, William Blair and Carnegie did not respond to requests for comment.

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