Ivanti Software Inc.

Pulse Secure had seen very strong demand for its network security and access products in 2020, and the breach is likely to slow net new license sales. Nonetheless, we view the scale and costs tied to the breach to be limited in scope, and we don't expect the breach to significantly hurt the company's virtual private network (VPN) business. The stable outlook reflects our view that Ivanti will maintain its significant base of recurring revenue; extract synergies from the MobileIron Inc., Pulse Secure LLC, and Cherwell Softwareacquisitions; and generate positive free cash flow over the next 12-18 months. We could lower the rating if Ivanti fails to successfully integrate the acquisitions, faces booking and revenue declines that result in break-even

...Ivanti is a larger and more diversified competitor in the IT services sector following a busy M&A year. Ivanti has closed on multiple acquisitions the past 12 months, which makes it a larger and better diversified information technology (IT) software and services provider. The transactions have resulted in doubling of revenue and EBITDA scale as well as an improved product and customer diversification. The Pulse Secure breach impact seems to be limited. During the first half of 2021, the Pulse Connect Secure product was affected by a previously unknown vulnerability. The company said only a handful of the 15,000 Pulse Secure customers were affected. It also said some of its customers were breached from previously known vulnerabilities for which fixes have been available for a few years. Ivanti has also engaged third-party security experts such as FireEye for support. Pulse Secure had seen very strong demand for its network security and access products in 2020, and the breach is likely to...

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