(Bloomberg) — Thoma Bravo, the software-focused buyout firm, agreed to acquire cybersecurity and compliance firm Proofpoint Inc. in a deal it said values the business at about $12.3 billion.
The private equity firm is offering $176 per share in cash, representing a 34% premium to Proofpoint’s Friday closing price, according to a statement Monday. Proofpoint’s board has unanimously approved the deal, which still needs approval from shareholders as well as regulatory clearance.
Proofpoint offers cloud-based threat detection, data archiving and information protection services to corporate customers. The acquisition will add to the $15.5 billion of private-equity takeovers in the technology industry announced this year, according to data compiled by Bloomberg.
“We believe that as a private company, we can be even more agile with greater flexibility to continue investing in innovation, building on our leadership position and staying ahead of threat actors,” Gary Steele, chairman and chief executive officer of Proofpoint said in a statement.
Thoma Bravo favors subscription-based platforms like Proofpoint that offer steady, recurring sources of revenue. It typically makes light-touch operational tweaks to the companies it buys, keeping management in place as it focuses on growth over cost-cutting.
Proofpoint will continue to be based in Sunnyvale, California, after the acquisition, which is expected to be completed in the third quarter. The agreement includes a 45-day “go-shop period” that allows Proofpoint’s board to solicit rival offers.
Morgan Stanley acted as exclusive financial adviser to Proofpoint. Goldman Sachs Group Inc. advised Thoma Bravo and is providing financing for the transaction.
The acquisition both “broadens Thoma Bravo’s already significant security portfolio” and “potentially opens further opportunities for Proofpoint to continue its expansion beyond its email security foundation,” according to Joseph Blankenship, who serves as vice president and research director for security and risk at Forrester Research Inc.
“We’ve seen much-needed consolidation among security vendors over the last two years,” Blankenship said in an emailed statement. “This also continues the trend of private equity investing in established cybersecurity brands like Proofpoint.”
Read more: Buyout Titan Bravo Sees Future of Subscriptions, Not Leverage
(Updates with CEO statement in fourth paragraph and analysis starting in eight paragraph.)
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