Cloud data security company Alert Logic announced today that its executive management, together with private equity firm Welsh, Carson, Anderson & Stowe, now owns a majority interest in Alert Logic. With the partnership comes an additional boost of primary capital from Welsh Carson and the chance for Alert Logic to scale out.
According to the announcement, the $45 million Security-as-a-Service company already partners with more than half of the largest providers that host or deploy cloud services. With threats to data’s welfare on the rise, the market for services that keep it safe grows. Alert Logic’s partnership with Welsh Carson allows for further tech investment and enables an international future for the company.
“Businesses are becoming more and more dependant all the time on strategic applications and data that resides in data centers,” says Alert Logic CEO Gray Hall. “As people move [applications and data] to the cloud they need different types of security solutions to protect their infrastructure in the cloud, and that’s our business.”
While the company’s anchored by its American roots for now, Welsh Carson’s resources give Alert Logic’s the potential to expand their reach. That means more products in more markets. “Three to five years from now we would expect to cover all major markets around the globe, and have a significantly expanded security product suite,” Hall says. “We’ve always invested heavily in our technology and are actively doing that today, but with Welsh Carson’s backing we have greater resources to invest faster, and not only making our products and technology scale more effectively, but also broadening the coverage of the cloud security services.”
The board decided last year Alert Logic would seek recapitalization opportunities in 2013, and give investors the chance to realize their investments or stick around long-term. Morgan Stanley led the company through the process and into an enviable position. ‘It wound up being a competitive scenario [to partner with Alert Logic] where several of the top private equity firms in the world submitted bids and Welsh Carson came out on top.”
The partners now share a vision for the future and agree on ways to realize it. “The management team and Welsh Carson see eye to eye on the size of the opportunity, the long-term duration of the opportunity, the company strategy and we think that this market segment that we’re pursuing is multiple billions in fact we’ve estimated the market at more than $5 billion,” Hall says. “And today as a [$45 million] company we believe we’ve only scratched the surface of that opportunity.”
Partnership with Welsh Carson provides capital and cushion as Alert Logic weighs options for its financial future.
“Management and Welsh Carson have a common mind and a common strategy that we’ve bought into that we think will be successful over the next few years,” Hall says. “What this means for the company three to five years from now could range from an IPO, to simply maintaining our independence as a private company; and the fact that Welsh Carson is starting now gives us the flexibility to keep our options open there.”