MobileIron MOBL recently announced that its board of directors collectively approved the $872 million all-cash buyout bid from Ivanti. Following the announcement, shares of MobileIron jumped 6.2% and closed at $7.05 on Sep 28.
Per the terms of the deal, Ivanti will be buying all MobileIron’s shares at $7.05 per share which translates to a 27% premium over MobileIron’s closing share price on Sep 24. The deal is expected to conclude toward the end of the fourth quarter of 2020, subject to shareholders, regulatory and customary approvals.
Barclays was the exclusive financial advisor, while Morrison & Foerster LLP was the legal advisor to MobileIron.
Simultaneously, Ivanti also announced a deal to acquire Pulse Secure from affiliates of Siris Capital Group, LLC for an undisclosed amount. Ivanti is supported by Clearlake Capital Group, L.P. and TA Associates Management L.P for both the buyouts.
The buyouts of MobileIron and Pulse Secure will help Ivanti in expanding its presence in the Unified Endpoint Management (UEM), Enterprise Service Management (ESM), and Zero Trust security solutions’ market.
Rationale Behind the Acquisition
Reportedly, MobileIron was looking for prospective buyers for some time now. The buyout would help in expanding the market for its products and help in managing increased expenditure on portfolio expansion due to product innovation and acquisitions.
We believe MobileIron has solid growth prospects. Growing focus on customer satisfaction is increasing mobility among employees of an enterprise. The job requires employees to switch between customer site and office which in turn leads to increased use of mobile devices including smartphones, enabling employees to access client data on the run
These factors increase the risk of losing valuable customer data to unsecured networks, for instance. This increases the need for a secure platform that guarantees seamless access to client data irrespective of employee location and time, which is where MobileIron’s innovative solutions come handy.
The demand for mobile security solutions is also rising owing to increased instances of cyber-attacks as hackers are taking advantage of the ongoing coronavirus pandemic to ramp up attacks on enterprises across all industries. Moreover, surge in remote work trends enhanced the need for end-to-end security as enterprises try to safeguard their sensitive data.
The company’s strength in UEM solution will enable it to rapidly penetrate high growth Enterprise Mobile Management (“EMM”) and Cloud Security and Desktop Security markets.
Per Global Market Insights data, worldwide enterprise mobility management market is envisioned to witness a CAGR of 15% between 2020 and 2026 while global cloud security is expected to witness a CAGR of 14.7% between 2020 and 2025, per a MarketsAndMarkets report.
MobileIron UEM solutions are based on zero trust enterprise security architecture with strong mobile-centric approach. The company has improved its UEM portfolio with mobile threat detection, multi-factor authentication and zero sign-on authentication capabilities.
The company’s products, particularly MobileIron Access and MobileIron Cloud, enjoy solid demand especially from governments across the world.
In the second quarter of 2020, the company’s revenues grew 16% year over year to $58.9 million. The company had $87.7 million in cash and cash equivalents and no debt on its balance sheet as of June 30, 2020.
MobileIron used to face stiff competition in the EMM space mainly from technology bellwethers like Microsoft and VMware along with companies specialising in mobile technology like BlackBerry.
Zacks Rank and Key Picks
MobileIron currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader sector are Jabil JBL, Blackbaud BLKB and Zoom Video Communications ZM, all flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for Jabil, Blackbaud and Zoom Video is currently pegged at 12%, 7.6% and 25%, respectively.
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