Select Page

LifeLock Inc. (NYSE: LOCK), an industry leader in identity theft protection is said to have engaged Evercore Partners Inc (NYSE: EVR) to defend itself against activist hedge fund Elliott Management Corp and explore strategic alternatives, including the possibility of a sale of the company. LifeLock’s stock jumped 6 percent, closing at $16.68 in intraday trading on Friday, after Reuters reported the story, bringing its market value to $1.66 billion. Elliott Management has more than $27 billion of assets under management. Its flagship hedge fund Elliott Associates LP was founded in 1977 by billionaire Paul Singer. The firm has offices in New York, London, Hong Kong and Tokyo, and has launched over 96 campaigns at 92 companies since 1994, according to Factset. Elliott has been actively amassing multiple significant company stakes lately, urging its long list of targets to seek lucrative exit strategies, including Citrix Systems Inc. (NASDAQ: CTXS), which two weeks ago agreed to merge its GoTo business with LogMeIn Inc. (NASDAQ: LOGM) in a stock deal valued at $1.8 billion; struggling British discount chain Poundland Group PLC (LSE: PLND), which South African retail conglomerate Steinhoff International Holdings NV (FWB/JSE: SNH) agreed to acquire for $800 million; cyber security firm Imperva (NYSE: IMPV), founded by a team of prominent Israeli high-tech entrepreneurs, which recently hired Frank Quattrone’s Qatalyst Partners to explore strategic alternatives under pressure from Elliott; Polycom (NASDAQ: PLCM), which private equity firm Siris Capital Group LLC  recently agreed to acquire in a deal valued at $2 billion; Canada’s Mitel Networks (NASDAQ: MITL; TSX: MNW) which had previously offered to acquire Polycom; and Symantec (NASDAQ: SYMC), which agreed to acquire Blue Coat, the #1 market share leader in web security, for $4.65 billion. Elliot had also bought a large stake in Qlik Technologies (NASDAQ: QLIK)(QLIK), a visual analytics company, which private equity firm Thoma Bravo LLC agreed to acquire for $3 billion in early June. LifeLock provides proactive identity theft protection services for consumers and consumer risk management services for enterprises. The company’s ecosystem combines data repositories of personally identifiable information and consumer transactions, predictive analytics and a technology platform. It applies predictive analytics to the data in its repositories to provide its members and enterprise customers’ actionable intelligence that helps protect against identity theft and identity fraud. LifeLock offers its consumer services on a monthly or annual subscription basis. It provides consumer risk management services, including delivering its on-demand identity risk, identity-authentication and credit information about consumers to its enterprise customers in the daily transaction flows. In February 2008, credit bureau Experian sued LifeLock for fraud and false advertising. Experian alleged that LifeLock placed false fraud alerts on behalf of its clients, thus keeping LifeLock clients’ files in a constant state of alert. As part of a 2009 settlement, LifeLock set up a new proprietary service that does not rely on setting fraud alerts. In December 2008 LifeLock entered into an agreement with TransUnion, one of the three main credit bureaus, to automate the process of alerting customers of potential unauthorized access via their credit reports. In March 2010, LifeLock was fined $12 million by the Federal Trade Commission (FTC) for deceptive advertising. The FTC called their prior marketing claims misleading to consumers by claiming to be a 100% guarantee against all forms of identity theft. FTC Chairman Jon Leibowitz, referring to a LifeLock TV ad showing a truck, said that “the protection they provided left such a large hole … that you could drive that truck through it.” In 2015, the FTC found LifeLock to be in contempt of the 2010 agreement, and was ordered to pay $100 million to settle the charges for failing to protect consumer information and deceptive advertising, the largest monetary award obtained by the Commission for an enforcement action. LifeLock was co-founded in 2005 with $2 million in seed funding by Todd Davis and Robert J. Maynard, who left the company in 2007 amid controversy. In 2006 the company raised a $5 million Series A round led by Bessemer Ventures. In 2007, LifeLock raised $6.85 million in a Series B round led by Kleiner Perkins Caufield & Byers. In 2008, it raised $25 million in a Series C round led by Goldman Sachs, followed by a $40 million Series D round led by Symantec Corp. in August 2009. In March 2012, LifeLock raised $100 million in a private equity funding round from River Street Management, with participation from its previous investors, to fund its acquisition of ID Analytics, an identity theft risk prediction technology. The company’s total pre-IPO funding amounted to approximately $180 million. In October 2012, LifeLock conducted an IPO priced at $9.00 per share, raising about $140 million. In December 2013, LifeLock acquired for $42.6 million Lemon Wallet, a digital wallet platform which stores payment, loyalty, and identification cards on members’ smartphones. Photo: Paul Singer, Founder of Elliott Management Corp. (Reuters/Steve Marcus)]]>