Recent activity in the security software space could make Vancouver’s Absolute Software (TSX:ABT) an attractive target, says Industrial Alliance Securities analyst Blair Abernethy.
On Monday, security software vendor Symantec acquired cybersecurity firm Blue Coat Systems for $4.65-billion.
“With this transaction, we will have the scale, portfolio and resources necessary to usher in a new era of innovation designed to help protect large customers and individual consumers against insider threats and sophisticated cybercriminals,” said Symantec chairman Dan Schulman. “Together, we will be best positioned to address the ever-evolving threat landscape, the massive changes introduced by the shift to mobile and cloud, and the challenges created by regulatory and privacy concerns.”
Abernethy says the huge pickup by Symantec is just the latest sign of consolidation in the security software space, and it could soon have eyes landing squarely on Absolute.
“We believe that Absolute, with its unique BIOS-embedded end-point market position and more open strategy towards software partnerships, could potentially become viewed as a differentiating take-out candidate by larger security software vendors,” says the analyst. “We see several potential upcoming catalysts, including large new customer contract wins (particularly outside of the Education vertical), traction with new partnerships, and recovery in the international business.”
In a research update to clients today, Abernethy maintained his “Buy” rating and one-year price target of $11.00 on Absolute Software, implying a return of 65 per cent at the time of publication.