Thoma Bravo to Buy Cybersecurity Firm Proofpoint for $12.3 Billion
Transaction is the Largest Cloud Acquisition by a Private Equity Firm in History
SAN JUAN — Proofpoint Inc., a leading cybersecurity and compliance company, has announced that it has entered into a definitive agreement to be acquired by Thoma Bravo, a leading private equity investment firm focused on the software and technology-enabled services sector, in an all-cash transaction that values Proofpoint at approximately $12.3 billion.
Under the terms of the agreement, Proofpoint shareholders will receive $176 per share in cash, “representing a premium of approximately 34 percent over Proofpoint’s closing share price on April 23,” a joint press release pointed out, “and a premium of approximately 36 percent over Proofpoint’s three-month volume-weighted average closing share price through April 23.”
Upon completion of the transaction, Proofpoint will become a private company and “continue providing the most effective cybersecurity and compliance solutions to protect people and organizations around the world,” the companies said.
“We continue to find opportunities and partner with leading technology companies to provide innovative solutions and drive growth,” said Orlando Bravo, the Puerto Rican entrepreneur who co-founded and is managing partner at Thoma Bravo, which already has more than $76 billion in assets under management. “In this case, we are excited to work with Proofpoint teams in a pivotal moment as companies worldwide face a challenging cybersecurity environment.”
Proofpoint’s board unanimously approved the agreement and “recommends that Proofpoint shareholders vote in favor of the transaction at the Special Meeting of Shareholders to be called in connection with the transaction,” the release reads. However, the agreement includes a 45-day “go-shop” period, expiring June 9, which allows the board to “initiate, solicit and consider alternative acquisition proposals,” as well as the right to terminate the merger agreement “to enter into a superior proposal subject to the terms and conditions of the merger agreement.”
The transaction is expected to close in the third quarter. Upon closing of the transaction, Proofpoint’s common stock will no longer be listed on any public market. The company will continue to be based in Sunnyvale, Calif.
“Proofpoint will benefit from the operating capabilities, capital support and deep sector expertise of Thoma Bravo—one of the most experienced and successful software investors in the world,” the release reads.
“Today’s announcement is a testament to the strength of Proofpoint’s people-centric approach to cybersecurity and compliance and underscores our important role preventing, defending and responding to today’s threats,” said Gary Steele, chairman and CEO of Proofpoint. “We have made tremendous strides in expanding the sophistication and scale of our offerings, and in 2020 we generated more than $1 billion in annual revenue—making Proofpoint the first [software as a service (SaaS)]-based cybersecurity and compliance company to reach that milestone. 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. Thoma Bravo is an experienced software investor, providing capital and strategic support to technology organizations, 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.”
Morgan Stanley & Co. is acting as financial adviser to Proofpoint, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as its legal counsel. Financing for the transaction is being provided by Goldman Sachs & Co., which is also serving as financial adviser to Thoma Bravo, and Kirkland & Ellis LLP is serving as its legal counsel.
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