Thoma Bravo to buy Proofpoint for $12.3bn

July 2021 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

July 2021 Issue

In a deal described as underlining its status as a powerhouse in the sector, cyber security and compliance company Proofpoint is to be acquired by private equity (PE) firm Thoma Bravo.

Under the terms of the definitive agreement, Proofpoint shareholders will receive $176 per share in cash, in an all-cash transaction valued at $12.3bn.

Furthermore, upon completion, the company will become a private company with the flexibility and resources to continue providing the most effective cyber security and compliance solutions to protect people and organisations around the world.

Additionally, Proofpoint will benefit from Thoma Bravo’s operating capabilities, capital support and deep sector expertise as one of the most experienced and successful software investors in the world.

“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,” said Gary Steele, chairman and chief executive of Proofpoint. “Thoma Bravo is an experienced software investor, providing capital and strategic support to technology organisations.”

Proofpoint’s board of directors has unanimously approved the definitive agreement with Thoma Bravo and recommends that Proofpoint shareholders vote in favour of the transaction.

With an integrated suite of cloud-based solutions, Proofpoint helps companies around the world stop targeted threats, safeguard their data and make their users more resilient against cyber attacks. Leading organisations of all sizes, including more than half of the Fortune 1000, rely on Proofpoint for people-centric security and compliance solutions.

“Proofpoint has established itself as a true powerhouse in the cyber security sector due to its innovative suite of market-leading products and impressive customer base of leading companies around the world,” said Chip Virnig, a partner at Thoma Bravo. “As the sophistication of cyber attacks continues to increase, Proofpoint is delivering the most effective solutions to help organisations protect their data and people across digital platforms.”

Seth Boro, a managing partner at Thoma Bravo, added: “Proofpoint’s opportunity as a privately held company is incredibly compelling, and we look forward to working closely with them to drive continued business growth and deliver world-class advanced threat protection.”

A leading PE firm focused on the software and technology-enabled services sectors, Thoma Bravo partners with a company’s management team to implement operating best practices, invest in growth initiatives and make accretive acquisitions intended to accelerate revenue and earnings, with the goal of increasing the value of the business.

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. Upon closing of the transaction, Proofpoint’s common stock will no longer be listed on any public market. The company will continue to be headquartered in Sunnyvale, California.

Acting as exclusive financial adviser to Proofpoint is Morgan Stanley & Co. LLC, with Skadden, Arps, Slate, Meagher & Flom LLP acting as legal counsel. Financing for the transaction is being provided by Goldman Sachs & Co. LLC. Goldman Sachs is also serving as financial adviser to Thoma Bravo, with Kirkland & Ellis LLP serving as legal counsel.

Mr Steele concluded: “This transaction 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.”

Fraser Tennant