CA Technologies, a company focused on digital transformation of businesses, yesterday announced that it will acquire Veracode, a Burlington, Mass.-based provider of application security solutions, for $614 million in cash. The news comes around two years after Veracode filed confidentially for an IPO, but it never followed through.
Why CA wants Veracode: There are two basic reasons for digital security breaches. One is the loss of credentials, and the other is defects in software. Veracode focuses on the latter, having scanned over 2 trillion lines of code for hundreds of applications.
Why Veracode wants CA: In a word, distribution. Veracode will now have access to a lot of large companies that it otherwise would have expended major resources to land as clients.
What happened to the IPO? Veracode CEO Bob Brennan says that the company did plan to go public back in 2015, but held off due to a public market swoon for enterprise software plus the need for some senior executive changes.
Who cashes out? Veracode had raised over $110 million in VC funding. Backers included Wellington Management, .406 Ventures, Accomplice, Cross Creek Advisors, Flexera Software, In-Q-Tel, Agman Partners, Meritech Capital Partners, Polaris Partners, StarVest Partners, Symantec and TELUS Ventures.