CyberArk Seeks $75m in U.S. IPO

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CyberArk & MacroCure
CyberArk & MacroCure

Two Israeli companies, biomedical firm MacroCure and Internet security company CyberArk, are planning initial public offerings in the United States that together could raise as much as $145 million.

CyberArk filed on Tuesday to raise up to $75 million in an initial public offering in the United States, which would make it the first-ever Israeli company in the hot field of cyber security to go public. It has yet to set a price range for its share price.

Riding the wave of biotech companies coming to Wall Street, MacroCure filed a prospectus for a U.S. IPO late on Tuesday. A developer of cell therapy products for healing wounds, the company did not disclose how much it seeks to raise or at what market valuation. But market sources said they expect it to raise $60 million to $70 million, for a company valuation of between $250 million and $300 million.

Founded in 1999, CyberArk is now one of Israel’s largest cyber security companies. It initially developed a product that enabled customers to transfer sensitive information between computers, but later changed its focus to some extent, using existing its technology to develop products that manage access to data through privileged passwords and the like, and is now widely regarded as the leader in the market.

Its real growth, however, has come in recent years. It now has about 1,500 customers, including about 30% of the Fortune 100 list of the largest U.S. companies.

The primary beneficiary of a successful IPO for CyberArk would be the venture capital fund Jerusalem Venture Partners, which has a 46% stake in the company. Goldman Sachs has another 24% after investing $40 million in the venture in 2011. CyberArk’s founder and CEO, Udi Mokady, owns 3.9%.

The company plans to trade on the Nasdaq Stock Market under the CYBR symbol. J.P. Morgan and Deutsche Bank are leading the underwriting.

Following rapid recent growth, CyberArk had $66.2 million in revenues last year, which was 40% up from 2012, derived from the sale of licenses and services. Although most of its expenses relate to marketing, it is still investing heavily in research and development. The company had net profits of $6.6 million last year , down from $7.9 million in 2012. For the first quarter of this year, it posted a net loss of $1.2 million, compared with net profit a year earlier of $100,000.

Founded in 2008, the company’s leading product, CureXcell is designed to treat chronic wounds through cell-based therapies. The product is now in Phase II clinical trials to test its efficacy against diabetes-related sores and arterial ulcers of the leg, with the company expecting results in 2015 and an application to the U.S. Food and Drug Administration made the year after that.

MacroCure lost $198.8 million in the last 12 months, bringing its combined losses since it was formed to $46 million. The company, which is controlled by private investors, still has $16 million in cash on its books.

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