High-tech entrepreneur Shlomo Kramer has sold his holdings in cybersecurity company Imperva Inc. (NYSE: IMPV), which he founded in 2002 and led as CEO until 2014. Imperva's market cap is $1.5 billion. According to a report to the US Securities and Exchange Commission last week, Kramer had no shares in Imperva as of the end of 2017, while he owned 6.3% of the company's share capital as of the end of February 2017.
Imperva's current share price is $43, about the same as the average price during the period between the two reports to the SEC, meaning that Kramer sold his shares for over $90 million. Kramer, one of the three founders of Check Point Software Technologies Ltd. (Nasdaq: CHKP) together with CEO Gil Shwed and chairperson Marius Nacht, is regarded as one of the most prominent high-tech entrepreneurs and investors. Forbes Magazine last year estimated his wealth at $4.6 billion. Kramer founded two more companies after Check Point and Imperva: Trusteer and Cato. Trusteer was sold to IBM in 2013, with Kramer garnering nearly $300 million on the deal. Two companies in which Kramer had more modest exits were Hyperwise and Lacoon, in which he previously invested. Both of them were sold to Check Point in 2015 for an aggregate total of $180 million.
Imperva, which provides data security solutions for organizations, is now undergoing a process of change under new CEO Christopher Hylen. Hylen, who became CEO last summer, is restructuring the company, which will probably include layoffs. Imperva announced this last week, noting that the goal of the change is to create a united, efficient, and customer-focused concern that will be able to take advantage of its existing growth opportunities. Restructuring will include consolidating groups according to four functions: sales, marketing, product management, and product development. In addition, the company says that layers in the enterprise will be reduced in order to empower the employees. The company expects to save $10 million as a result, which will be allocated to investment purposes. The cost of restructuring is $2.9 million before taxes, which will be recognized in Imperva's first quarter reports.
Noteworthy among Imperva's shareholders are activist fund Elliott Associates, which recently invested in communications company Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and announced its intention of leading the ejection of that company's directors who were involved in the Israel Security Authority's investigation. The fund invested in Imperva in May 2016, acquiring 10.6% of the company's shares. The fund announced at the time that it believed that Imperva "operates in an especially strategic part of the technology industry, with an attractive competitive position and a convincing array of products - aspects that in our opinion are not reflected in Imperva's current market cap." Under the fund's influence and following a dialogue with the company, it was later reported that Imperva had hired an investment bank in order to search for strategic possibilities, including the sale of the company. Imperva has not been sold, but Elliott Associates reported in September the sale of part of its holdings in the company at a handsome profit, and stated that it was "satisfied with the operational progress achieved in the company over the past year, including a 29% growth rate in revenue in the last quarter and substantial improvement in operating profit." Elliott Associates currently holds 8.4% of Imperva's shares.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 29, 2018
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