Would Raytheon consider a Forcepoint IPO?

Raytheon's CEO tamps down investor inquiry over whether defense contractor would consider taking its Forcepoint cyber product joint venture to the public stock exchanges.

Raytheon made its largest cyber bet in early 2015 when it paid $1.9 billion to acquire majority ownership of the former commercial-focused Websense business now known as Forcepoint.

That structure and recent comments by Forcepoint's CEO to a Germany-based business newspaper have spurred analyst speculation over the venture's long-term status related to Raytheon and prospects of Forcepoint listing on a public stock exchange.

During Raytheon's second quarter earnings call with investors Thursday, CEO Tom Kennedy attempted to reiterate the defense contractor's rationale behind establishing Forcepoint and said the status quo will continue.

Kennedy told investors Raytheon has "no plans at this time to do an (initial public offering) in the near future... so I'll take that off the table."

Kennedy's comments came nearly one month after Forcepoint CEO Matt Moynahan raised the possibility of an IPO for the Austin, Texas-based venture in comments to German business publication Boersenzeitung, according to a Reuters translation of the interview.

While Moynahan said it is too early to contemplate an IPO, he told the newspaper such a move could "unleash enormous potential in our company," the translation says.

Raytheon reports Forcepoint's financial results as a fifth business segment independent from the contractor's intelligence, information and services group that also houses cyber work. Both Kennedy and IIS President Dave Wajsgras sit on Forcepoint's board of directors.

(Click here for our Raytheon Top 100 profile, where Wajsgras details Forcepoint's relationship to IIS and the broader Raytheon company)

Forcepoint is undergoing a restructuring that involves the business taking "kind of a timeout to get their backroom up" and get ready for 2018, Kennedy said in the analyst call Thursday. The venture named a new government business leadership team in May to follow Moynahan's appointment last year.

For now, any thought of a new independent direction for Forcepoint is premature, according to Kennedy.

"This is a longer-term play for the company. And the overall focus and strategy for this was to break out the value we have associated with our deep cyber domain capabilities inside the company."

Raytheon expects Forcepoint to record $600 million in revenue this year, which would show 6 percent growth from last year.

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