The value of the day in Paris – Cybersecurity: Thales finalizes acquisition of Imperva early – 04/12/2023 at 12:06 pm

(AOF) – Thales (-1.22% to 137.45 euros) finalized this Monday the acquisition of Imperva, when the operation was initially scheduled to come into effect at the beginning of 2024. This is a major turning point for the technology and defense group, which becomes one of the five global leaders in cybersecurity, with more than 5,800 experts in 68 countries. In this specialty, its turnover is expected to reach 2.4 billion euros in 2024, both in the civil and defense sectors, with double-digit growth expected from then on.

Imperva is an American company, publisher of cybersecurity software and services that provides protection for corporate data and application software. Its acquisition for an enterprise value of US$3.6 billion was announced at the end of July.

This is Thales’ ninth acquisition in the area of ​​digital security in nine years, and the most important in the group’s history after Gemalto. In particular, it acquired Tesserent, a major player in cybersecurity in Australia, but also S21sec and Excellium, two major players in cybersecurity consulting, integration and managed services in Europe.

This operation “will generate significant value creation for Thales shareholders, in line with the objectives communicated in July 2023, when the acquisition was announced”, specifies the company.

She adds that the prospects for Thales’ Digital Identity and Security (DIS) business will thus be “significantly improved”. For this division, Thales now targets organic revenue growth between 2024 and 2027 of between 6% and 7% and an EBIT margin in 2027 of 16.5%.

Thales and Imperva will support their customers in addressing cybersecurity challenges, including the increasing number of cyberattacks. Global end-user spending is expected to be around $20 billion in 2024, according to analyst forecasts.

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Key points

– First or second in electronics for civil satellites, mission systems and sensors for defense, air traffic management, data protection and SIM cards and smart payments, created in 2020;

– Revenue of 17 billion euros from defense and security for 54%, aerospace industry for 28%, digital identity and security for 19% and civil aeronautics for 7%;

– International presence, 24% for France, 29% for other European countries, 14% in Asia, 12% in North America and 9% in the Middle East;

– Business model based on 4 pillars: the strength of R&D, with 20% of sales, synergies between businesses arising from in-depth market knowledge, an extensive base of digital assets and a global presence in +50 countries;

– Capital held by 2 joint shareholders, Dassault Aviation (24.63%) and the French State (25.68%), with Patrice Caine President and CEO of the board of directors made up of 16 members;

-Healthy financial situation, with debt classified as A-, significantly reduced to 894 billion euros at the end of June, compared to 7.6 billion euros in equity.

Challenges

– Strategy to refocus attention on aerospace, defense and security, and digital identity and security;

– Innovation strategy supported by R&D close to 20%:

– global ecosystem that brings together 1/3 of the workforce, with a portfolio of more than 23 thousand patents, 6 hubs, 3 digital factories and 50 academic partnerships;

– focus on five digital competencies: connectivity, tender data, cybersecurity and artificial intelligence, through the AI@Centech program and the TruE AI quantum approach;

– Low carbon environmental strategy:

– 25% reduction in direct CO2 emissions in 2023, 50% in 2030 (vs. 2018) and net zero objective in 2040,

– 100% eco-designed products and services in 2023,

– launches of green loans,

– 4 priority areas: environmental management, flight optimization, air traffic management, training and signaling;

– Acceleration of activities, obtaining contracts and investments in defense and security (2/3 of estimated profits) and aerospace (15%);

– Acquisitions of Excellium and S21sec (security division) and AAC (sonars);

– Visibility with a record order book increased by the entry into force of Rafale sales in the United Arab Emirates and, more generally, by Defense & Security needs.

Challenges

– Tensions in supply chains, in particular semiconductors and inflation: resilience of supply chains, increased recruitment and transfer of acquisition costs to customers;

– Spin-offs of advances in avionics and biometrics with the resumption of air traffic and then investments in R&D in quantum sensors, cloud security and IoT data processing;

– Lower aerospace order rate than the group;

– After a 41% jump in order capture and 9.6% in revenue at the end of September 2022, the objectives for 2022 were confirmed: revenue close to 5.5% and operating margin of 10.8 to 11, 1%.

– Interim dividend for 2022 of €0.70 paid in December and share buyback.

The end of a duopoly?

For several decades, American Boeing and European Airbus shared 99% of the world market for aircraft with more than 110 seats. This market is worth more than 100 billion dollars per year. However, this duopoly appears weakened in 2022 for several reasons. First, for the first time, two medium-haul, single-aisle aircraft, the C919 from China’s Comac and the MC-21 from Russia’s Irkut, are preparing to enter service. Added to this is the Boeing 737 MAX crisis. With the cessation of deliveries of this aircraft between 2019 and 2021, the production balance was disturbed. In 2021, Boeing recorded 340 deliveries, with Airbus remaining in the lead with 611.

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