CyberArk Breaks Israel’s Security IPO Silence With Surge

CyberArk Software Ltd. rallied 87 percent in its New York trading debut after becoming the first Israeli cybersecurity company to go public in the U.S. since 1999.

The company raised $85.8 million in an initial public offering yesterday, selling 5.36 million shares for $16 apiece. CyberArk initially marketed its stock in a range of $13 to $15 a share, according to regulatory filings. The shares rose to $29.94 today.

CyberArk tapped equity markets amid a rash of data breaches at companies from Home Depot Inc. to JPMorgan Chase & Co. that sent shares of cybersecurity companies like Palo Alto Networks Inc. and Check Point Software Technologies Ltd. soaring. CyberArk, which targets security threats inside a company’s network as opposed to external attacks, is the first Israeli cybersecurity firm to IPO in the U.S. since Radware Ltd. listed shares in 1999, according to data compiled by Bloomberg.

“We always felt we had an opportunity to build a large company and not chase a quick exit,” co-founder and Chief Executive Officer Udi Mokady said by phone from New York today. “We’re going to press the pedal on the model that got us here.”

CyberArk Shareholders

Co-founded by Mokady in 1999, CyberArk focuses on security threats inside a company’s network by monitoring privileged accounts of employees connecting to the network. It sells in 65 countries in North America, Europe and the Asia Pacific region, and plans to use a network of 200 re-sellers around the world to expand into Latin America, Eastern Europe, and Africa, said Mokady, who served in the intelligence unit of the Israeli Defense Forces.

CyberArk posted net income of $6.6 million last year on revenue of $66.2 million, according to a Sept. 23 filing. The company may also use proceeds of the share sale to fund acquisitions, it said.

Jerusalem Venture Partners is the largest shareholder of CyberArk, with a 37.8 percent stake, and Goldman Sachs Group Inc. is the second-largest, holding 19.4 percent of shares, after the offering and before the exercise of the underwriters’ option, according to the filing.

JPMorgan, Deutsche Bank AG, and Barclays Plc underwrote the IPO.

The Petach, Tikva, Israel-based company’s shares trade on the Nasdaq Stock Market. The ticker is CYBR.