Warburg Pincus-backed cybersecurity firm eSentire explores sale, sources say

By Milana Vinn

NEW YORK (Reuters) – The owners of eSentire are exploring options including a potential sale that could value the cybersecurity company at about $1 billion, including debt, according to people familiar with the matter.

ESentire — which is owned by investment firms Warburg Pincus, Caisse de dépôt et placement du Québec (CDPQ) and Georgian — is working with investment bank Evercore on a sale process that could attract interest from other private equity firms, the sources said, requesting anonymity as the discussions are confidential.

Waterloo, Ontario-based eSentire’s owners are hoping to command a valuation for the company equivalent to more than 7 times its annual recurring revenue of about $150 million, the sources said, cautioning that no deal is guaranteed.

Warburg Pincus, CDPQ and Evercore declined to comment. Georgian and eSentire did not respond to requests for comment.

Founded in 2001, eSentire is a maker of artificial intelligence-powered cybersecurity tools that help companies investigate and stop security threats before they disrupt operations. It counts more than 2,000 organizations in over 80 countries across several industries among its customers.

Warburg Pincus first invested in eSentire in 2017. Canadian pension fund CDPQ and Canadian venture capital firm Georgian acquired a significant stake in eSentire from Warburg in 2022.

Dealmaking in the cybersecurity industry has been robust amid a surge in spending on AI-based security software from large corporations. Earlier in August, Reuters reported that Japanese cybersecurity firm Trend Micro (OTC:) is exploring a sale after attracting takeover interest.

In July, Google parent Alphabet (NASDAQ:) attempted to strike a $23-billion deal to buy cybersecurity startup Wiz before the talks fizzled out.