According to Fortune Business Insights, the global cyber security market is expected to grow from $112.01 billion in 2019 to $281.74 billion by 2027. The growth is expected to be driven by the demand for enterprise security solutions from the BFSI, manufacturing, and healthcare sectors. Forescout Technologies (Nasdaq: FSCT), one of the many cyber security players, is failing to cash in on this growth. The company recently delivered fourth-quarter results that failed to impress the market. Forescout also announced its sale to private equity firm Advent International Corp.

Forescout Technologies’s Financials

For the fourth quarter, Forescout’s revenues grew 8% to $91.3 million, falling significantly short of the analyst estimates of $95.23 million. GAAP net loss was $20 million compared with a loss of $17.9 million a year ago. On an adjusted basis, net loss was $0.09 per share, compared with a loss of $0.01 per share a year ago and missing the Street’s estimated loss of $0.07 per share.

By segment, License revenues grew 2% to $48.4 million. The segment included $6.6 million in one-year term-based license subscription contracts. Subscription revenues grew 14% to $37.6 million and professional services revenues grew 23% to $5.3 million.

Forescout ended the year with revenues growing 13% to $336.8 million and net loss widening from $74.8 million in 2018 to $118.5 million. On an adjusted basis, it reported a net loss of $0.84 per share which doubled over the previous year.

Forescout’s Private Equity Acquisition

Earlier this month, Forescout announced that it was getting acquired by private equity firm Advent International Corp. for an estimated $1.9 billion. Advent will not be alone in the acquisition. Another private equity player Crosspoint Capital Partner will be a co-investor and an advisory body for the acquired entity. Besides helping turn around Forescout’s profitability issues, the transaction is expected to help Forescout build on its success in the device visibility and control market and further expand its leadership in IoT cyber security.

Private equity players have been buying tech players with a vision of turning them around. Last December, LogMeIn also announced its acquisition by private equity firm Francisco Partners and Evergreen Coast Capital. But Forescout’s acquisition is plagued by investor angst. Class action suits have been filed against Forescout alleging an unfair valuation to the acquisition.

Forescout’s Expanding IoT Offering

Meanwhile, Forescout continues to improve its IoT offering.  Last month, it entered into a strategic partnership with Medigate, a healthcare-focused IoT service provider. Medigate is known for its dedicated medical device security and asset management solutions that help healthcare organizations continuously discover, identify, assess, and secure all Internet of Medical Things (IoMT), IoT, operational technology (OT) and IT network connected devices. As part of the partnership, the companies will integrate Medigate’s IoMT visibility, anomaly detection and lifecycle management capabilities with Forescout’s enterprise device visibility, automated segmentation, and incident response capabilities. Forescout will also be able to resell its services on the Medigate Platform.

Medigate enables IT, info security, biomedical, and clinical engineering teams to identify, monitor, and secure every medical device on the clinical network. By leveraging Medigate’s expertise, Forescout will be able to enforce granular access control, segmentation, and other compliance policies for clinical networks. It plans to extend these capabilities across all other connected devices in the health delivery organization.

Its stock is trading at $31.75 with a market capitalization of $1.6 billion. It was trading at a 52-week high of $43.69 in April last year. It had fallen to a 52-week low of $20.66 in October last year.