Private equity firm Thoma Bravo has built up its cyber security portfolio through purchasing Proofpoint for about US$12.3 billion.
Under the terms of the agreement, Proofpoint shareholders will receive US$176.00 per share in cash, representing a premium of approximately 34 percent over Proofpoint’s closing share price on 23 April.
Upon completion of the transaction, Proofpoint will become a private company and stands to benefit from the operating capabilities, capital support and deep sector expertise of Thoma Bravo. It will continue to operate from its California headquarters.
“Today’s announcement is a testament to the strength of Proofpoint’s people-centric approach to cybersecurity and compliance and underscores our important role in preventing, defending and responding to today’s threats,” Proofpoint chairman and CEO Gary Steele said.
“We have made tremendous strides in expanding the sophistication and scale of our offerings, and in 2020 we generated more than US$1 billion in annual revenue – making Proofpoint the first software-as-a-service-based cyber security and compliance company to reach that milestone.
“Thoma Bravo is an experienced software investor, providing capital and strategic support to technology organisations, and our partnership will accelerate Proofpoint’s growth and scale at an even faster pace. This is an exciting new chapter for Proofpoint that would not have been possible without our employees’ hard work and commitment to our customers, partners and each other.”
According to Proofpoint lead independent director Dana Evan, the transaction presented a great outcome for shareholders, employees and customers.
“Following Thoma Bravo’s approach, we thoroughly reviewed the proposal with the assistance of independent financial and legal advisors. We determined this premium, all-cash offer and partnership would create immediate and certain value for shareholders and help us achieve our operational and market ambitions more quickly for the benefit of our customers,” Evan said.
Thoma Bravo managing partner Seth Boro added it will work closely with Proofpoint to drive continued business growth.
“Thoma Bravo’s approach to value creation is rooted in partnering with the organization in which we invest and looking for opportunities to both enhance their existing operations and build technology platforms that drive significant growth,” Boro said.
Other security vendors that Thoma Bravo has within its company portfolio include Barracuda, Blue Coat, Centrify, ConnectWise, digicert, Entrust, Imperva, LogRhythm, McAfee, SailPoint, SolarWinds, Sophos, Venafi and Veracode.
The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions, including approval by Proofpoint shareholders and receipt of regulatory approvals.
The acquisition news coincided with Proofpoint’s first quarter results ending 31 March, which saw total revenue increase 15 per cent to US$287.8 million. Gross profit also rose from US$180.8 million to US$214.3 million.
“Our first quarter results mark a strong start to the year after record revenues in fiscal year 2020,” Steele said. “These results are a testament to our focused execution and people-centric approach to threat protection, information protection and compliance, which is winning across our market.”