Article from a few months ago where two CVT exec's were interviewed. This was during the time the SP was raging. The MC quoted during the interview was obviously CVT's valuation at that stage.
Covata (ASX: CVT), a Sydney, Australia based provider of networking security, could consider an IPO in the United States once it has a market cap of more than USD 300m, Vice President of Communications, Growth and Investor Relations Nichola Parker told this news service.
Founded in 2007, Covata encrypts files so that organizations can protect and send their data securely.
Parker said a US IPO is “certainly a possibility.” She noted that the company's current market cap is in the range of USD 200m to USD 220m, and that companies seem to list themselves on the NASDAQ or NYSE once they've reached the USD 300m threshold. “So right now we're focused on growth and our global expansion,” she said.
Parker added that in the meantime, Covata wants to position itself as a solid play for American investors on the Australian Securities Exchange. “In America, investors don't normally have access to a security company that's where we are right now,” she explained, “because typically the security companies are listed by big banks. These are USD 500m to USD 1bn companies, and they were taken public by entities like Morgan Stanley, so investors have already missed that boat.”
In March, Covata announced that it had signed a 10-year worldwide agreement with US networking giant Cisco Systems (NASDAQ: CSCO), under which Cisco will license Covata's security product and platform technologies on a SaaS (software as a service) basis. Terms were not disclosed.
Since news of the Cisco deal, Covata, whose US headquarters are based in Reston, Virginia, has been inundated with queries about what Cisco plans to do with its technology, said Jim Taneyhill, Covata's chief revenue officer, during the same interview with Parker. “There's interest from service providers and OEMs, people wanting to know how we do what we do,” Taneyhill said. Covata is not ready to release the details about how Cisco will deploy its technology, he added.
Covata's strategy, Taneyhill explained, is primarily centered around providing networking security to large incumbent service providers outside the continental US. “We're focusing on Europe heavily, and the top incumbent telcos. A telco that has a large wireline and wireless play is someone that has a large enterprise inside their country or their geography tend to lean on.”
The company also counts a number of governments among its clientele.
Covata is looking to expand its efforts in Latin America, “from Mexico all the way down into South America,” Taneyhill said. In the Asia Pacific region, the company is considering expansion into India, Singapore and Taiwan, among other locations.
In each case, Taneyhill explained, Covata is likely to follow the model it has used successfully in Europe, where it partners with NSC Global, a provider of network implementation and support services. The company would look for a similar relationship in other territories.
Taneyhill said Covata first ascertains what a client's enforcement policies are, then how it will authenticate the people who will be working with the data, and then figures out the best ways to encrypt the data.
Parker pointed out that, importantly, the security apparatus is not tied to one person or persons – a distinction that will grow in importance as self-driving automobiles and myriad devices inside the home and elsewhere will be controlled by sophisticated computer systems.
“As we get into switches, remote controls and the Internet of Things, the three pillars that underpin what we do will support that transition,” Parker said. “It will mean that no matter where the data is traveling, or who it's talking to, it's encrypted securely.”
Telecom companies, cable operators and others whose businesses depend on the secure transfer of data will increasingly see the need to encrypt that data, Taneyhill said. Recent security breaches will also convince retailers and other entities to double down on the technology, he added.
“I think people will look back at the industry in three or four years,” Taneyhill said, “and see the Sony, Home Depot and Target security breaches, and say, how could everybody believe their firewalls or network perimeter security was good enough? How could you not take the next logical step of encrypting all your data?”
In December 2013, department store chain Target revealed that the credit card data of 40 million customers was stolen. In November 2014, Sony Pictures Entertainment was hacked by a group that called itself the “Guardians of Peace.” More than 100 terabytes of confidential data was breached, including a series of controversial emails, and Sony's Twitter account was compromised. Also in the fall of 2014, the email addresses of 53 million Home Depot customers were leaked.
by David B. Wilkerson in Chicago
CVT Price at posting:
32.5¢ Sentiment: Hold Disclosure: Held
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