logo
  Join        Login             Stock Quote

Check Point, Fortinet Could Be Winners If Dell Taken Private

 February 04, 2013 02:05 PM
 


(By Mani) PC maker Dell, Inc.(NASDAQ: DELL) is rumored to be taken private by founder Michael Dell, along with Microsoft Corporation (NASDAQ: MSFT) and Silver Lake Partners in the largest leveraged buyout since the global financial crisis.

The buyout group is reportedly discussing a deal to take Dell private for $13 to $14 a share, valuing the company at between $22.6 billion and $24.4 billion, according to Wall Street Journal.

In this scenario, let's see who would be the beneficiaries if Dell is taken private.

[Related -Check Point Software Technologies Ltd. (NASDAQ:CHKP): What Could Drive Check Point In 2014?]

Check Point Software Technologies Ltd.(NASDAQ: CHKP) and Fortinet, Inc.(NASDAQ: FTNT) would be the key winners as these companies could gain share in the Unified Threat Management (UTM) market on the potential acquisition of Dell.

"We believe CHKP and FTNT could be near-term beneficiaries of Dell's potential take-out deal if it does eventually occur," Oppenheimer analyst Shaul Eyal wrote in a note to clients.

In March 2012, Dell bought SonicWall, which competes with Check Point and Fortinet, in the UTM space, and there could be a near-term disruption in Dell's SonicWall business given an integration process that would mean potential displacements by Check Point and Fortinet.

[Related -5 Key Takeaways From International Business Machines Corp. (NYSE:IBM)Troubles]

In 2011, the overall UTM market saw strong growth of 17.4 percent and reached $2.2 billion. Given SonicWall's market share position of 8.1 percent, any business disruption should be a positive for the top two vendors.

Fortinet and Check Point are considered the market leaders with 18 and 13 percent shares, respectively. In 2011, SonicWall was the 4th largest UTM vendor with $181.2 million in revenue according to IDC.

There were similar displacements for both companies on the heels of MAcfee's take-out by Intel Corporation (NASDAQ: INTC) in August 2010.

"It could be déjà vu all over again. On the heels of FTNT's strong 4Q12 results and CHKP's conservative FY13 guidance investors could be viewing our assumption as a feasible one which could result in continued outperformance for both," Eyal added.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageLevel 3 Communications, Inc. (LVLT): A Good Time To Buy Says Macquarie

On a day Wall Street is struggling to advance, Level 3 Communications, Inc. (NYSE:LVLT) is having no such read on...

article imageAbercrombie & Fitch Co. (ANF) Q2 Earnings Preview: The Unkind Quarter

Abercrombie & Fitch Co. (NYSE:ANF) will be holding its second quarter 2014 earnings conference call for all read on...

article imageWorkday Inc. (WDAY) Q2 Earnings Preview: Built In Surprise

Workday Inc. (NYSE:WDAY) plans to announce its fiscal 2015 second quarter results after market close on read on...

article imageArcelorMittal SA (ADR)(MT): Steel Stocks about to Get Red Hot

For the second consecutive day, a major broker upgraded a steel company by advancing their recommendation read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.