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Cybersecurity Firm ForeScout to Explore Potential Sale

Scott Deveau, Liana Baker and Kiel Porter

(Bloomberg) -- Cybersecurity company ForeScout Technologies Inc. is exploring strategic options, including a possible sale, after activist investors built a stake, according to people familiar with the matter.

The San Jose, California-based company is working with a financial adviser, said the people, who asked to not be identified because the matter isn’t public. A final decision on pursuing a sale hasn’t been made and the company could decide to remain independent, the people said.

ForeScout rose 6.8% to $33.06 at 12:01 a.m. in New York trading Monday, giving the company a market value of about $1.56 billion. Its shares are up about 22% in the past year.

A representative for ForeScout declined to comment.

The company’s effort comes amid a wave of industry consolidation. Private equity firm Thoma Bravo agreed last month to buy British cybersecurity firm Sophos Group Plc for $3.8 billion.

Activist investor Corvex Management and its partner, Jericho Capital Asset Management, disclosed a combined 14.5% in ForeScout last month and said they planned to push for changes at the company.

The cybersecurity firm has the potential to double sales over the next five years as it shifts to a subscription-based model, Corvex Managing Partner Keith Meister said at an investor conference in October.

ForeScout’s software allows customers to see what devices are connected to a network, according to its website.

ForeScout cut its revenue forecast for 2019 last week, as sales fell below expectations in areas including Europe, the Middle East and Africa.

(Updates share price in third paragraph.)

--With assistance from Crystal Tse.

To contact the reporters on this story: Scott Deveau in New York at sdeveau2@bloomberg.net;Liana Baker in New York at lbaker75@bloomberg.net;Kiel Porter in Chicago at kporter17@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Matthew Monks, Michael Hytha

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