Checkmarx To Be Bought By Hellman & Friedman For $1.15B Valuation

Application security testing vendor Checkmarx has grown its headcount to more than 700 people, up 28 percent from 534 employees a year ago and 73 percent from 395 employees two years ago.

Checkmarx is being purchased by private equity firm Hellman & Friedman (H&F) for a $1.15 billion valuation in the largest acquisition of an application security company ever.

The Tel Aviv, Israel-based vendor said the proposed acquisition will bolster Checkmarx’s already outstanding growth at a time when software security is critical for modern enterprises. More than 40 of the Fortune 1000 have turned to Checkmarx to mitigate risk, secure code, and embed security into the software development lifecycle, according to the company.

“With more corporations leveraging software development to scale their business than ever before, executives are acutely aware of the increased risks caused by software exposure,” Checkmarx CEO Emmanuel Benzaquen said in a statement. “We are thrilled to partner with H&F in our journey that takes our ‘software equals security’ vision to the next level.”

[Related: F5 Networks To Buy Shape Security For $1B To Safeguard Applications]

Checkmarx was founded in 2006, employs more than 700 people, and has been owned by Insight Partners since receiving an $84 million investment from them in June 2015. Insight plans to retain a significant minority stake in Checkmarx following the sale to H&F. Checkmarx executives weren’t immediately available for additional comment.

More than 1,400 customers in 70 countries depend on Checkmarx’s suite of application security testing tools, the company said. The company’s offerings are focused on helping developers bring vulnerabilities in software solutions to light before disaster strikes.

Checkmarx has grown its headcount 28 percent from 534 employees a year ago and 73 percent from 395 employees two years ago, according to LinkedIn. The most aggressive hiring has come in the IT and engineering departments, which have increased their staffing by 44 percent and 31 percent, respectively, over the past year, according to LinkedIn.

“Even before we invested in the company in 2015, we have been continuously impressed by the leadership to come out of this team of game changers and innovators,” Insight Partners Managing Director Richard Wells said in a statement. “We will remain active supporters and vocal champions of the Checkmarx team.”

San Francisco-based Hellman & Friedman was founded in 1984 and has invested more than $50 million of committed capital into over 90 companies. The company’s limited technology investments include spatial information management software provider Intergraph – which was purchased in 2006 and sold in 2010 – and workforce management software developer Kronos, which has been owned since 2007.

“As cybersecurity threats continue to intensify, we strongly believe that embedding security early in the software development lifecycle is critical,” Hellman & Friedman Partner Tarim Wasim said in a statement. “We look forward to building on Checkmarx’s tremendous success to date and supporting the company’s rapid growth in the years ahead.”

Checkmarx lists channel partners on its website for Asia-Pacific, Europe, the Middle East and Africa (EMEA) and Latin America, but not for North America. Benzaquen told CRN in June 2015 that Checkmarx uses partners more heavily in Asia-Pacific, but primarily goes direct to major accounts in North America.

Checkmarx is the third major application security vendor to be acquired in the past 18 months. Thoma Bravo bought Burlington, Mass.-based application security testing vendor Veracode from Broadcom in November 2018 for $950 million, and F5 Networks bought Santa Clara, Calif.-based application security star Shape Security in December 2019 for $1 billion for its fraud and abuse prevention capabilities.