Thoma Bravo has agreed to take private cybersecurity firm Proofpoint under a $ 12.3 billion deal, as the tech-driven private equity firm continues to push for larger deals.
The US buyout group will acquire the California-based company at a 34% premium to its market price starting Friday, paying Proofpoint shareholders $ 176 per share. The company’s stock price rose more than 30 percent at the start of trading in New York.
The deal would be the largest private equity-backed software buyout ever, Refinitiv data shows, before a $ 11 billion supply by a group led by Hellman & Friedman to purchase HR software company Ultimate Software in 2019.
It comes as many companies have been forced to step up their cyber protection as corporate ransom hacks – when cybercriminals encrypt data and demand a fee to unblock it – have exploded during the pandemic.
Proofpoint’s board of directors has approved the deal, which includes a so-called “go shop” period expiring on June 9. This means the company has 45 days to review proposals from other parties.
Thoma Bravo has previously invested in SolarWinds, the software company at the center of a massive cyber espionage campaign discovered in December. US security officials said Russia was probably behind the spy attempt, which hijacked SolarWinds software and endangered its government and business customers.
Thoma Bravo and rival private equity group Silver Lake together owned about 75% of SolarWinds at the end of September, according to the filings. They sold a $ 315 million stake in the company to one of their own long-time backers, the Canadian Public Pension Plan Investment Board, shortly before the United States issued a hacking warning last year .
Chicago-based Thoma Bravo, specializing in technology transactions, has recruited larger software companies in recent months.
In December, he struck the largest private equity-backed tech deal of 2020, buying US real estate software group RealPage in a Acquisition of $ 10.2 billion. He agreed to buy Calypso, the trading software group, with a valuation of $ 3.75 billion in March, 37 times the $ 100 million the company generated in earnings before interest, taxes, depreciation and amortization during the year to ‘in December 2020.
Cyber security has become a top priority over the past year for large companies, especially in the financial services industry, as remote working during the coronavirus pandemic has reduced cyber defenses.
The rapid growth of connected objects, such as smartwatches, printers and industrial equipment, has also led to the proliferation of new cyberthreats that can compromise the IT infrastructure of companies, according to several studies.
Tech deals accounted for 28% of all private equity deals by value in 2020, according to Refinitiv, as the pandemic increased demand for businesses less affected by closures.
Proofpoint also reported its first quarter results on Monday, reporting a loss of $ 45.3 million in the first three months of the year. The company’s revenue of nearly $ 290 million was up 15% from the same period last year.
The transaction is expected to close in the third quarter of 2021.
