Thoma Bravo To Buy Proofpoint (PFPT) In $12.3 Billion Deal

By Amit Chowdhry ● April 26, 2021
  • Proofpoint, Inc. (NASDAQ: PFPT) announced that it has entered into a definitive agreement to be acquired by Thoma Bravo in an all-cash transaction that values Proofpoint at approximately $12.3 billion

Proofpoint, Inc. (NASDAQ: PFPT) — a leading cybersecurity and compliance company — 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. And under the terms of the deal, Proofpoint shareholders will receive $176 per share in cash, representing a premium of approximately 34% over Proofpoint’s closing share price on April 23, 2021, the last full trading day prior to the transaction announcement, and a premium of approximately 36% over Proofpoint’s three-month volume-weighted average closing share price through April 23, 2021. 

Upon the completion of the transaction, Proofpoint will become a private company with the flexibility and resources to continue providing the most effective cybersecurity and compliance solutions to protect people and organizations around the world. Plus 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.

Deal Details

Proofpoint’s Board of Directors has unanimously approved the agreement with Thoma Bravo 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. And the agreement includes a 45-day “go-shop” period expiring on June 9, 2021 – which allows the Board and its advisors to actively initiate, solicit, and consider alternative acquisition proposals from third parties. 

The Board will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of the merger agreement. And there can be no assurance that this “go-shop” will result in a superior proposal and Proofpoint does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or otherwise required.

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

KEY QUOTES:

“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. 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 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.”

— Gary Steele, Chairman and CEO of Proofpoint

“We are confident that this transaction is a great outcome for our shareholders, our employees, our customers, and our company. 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. Today’s announcement is a credit to the Proofpoint team which has delivered outstanding operating performance without ever losing sight of our customers, positioning the Company to capture significant value for our shareholders.”

— Dana Evan, Lead Independent Director of the Proofpoint Board of Directors

“Proofpoint has achieved tremendous outcomes for customers around the world, and we’re excited to partner with this talented team at a moment when organizations need innovative solutions to navigate an increasingly treacherous cybersecurity environment. Proofpoint places people at the center of its compliance and security strategy and plays a vital role in helping enterprises protect their data. 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. 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 to even more customers in even more ways.”

— Seth Boro, a Managing Partner at Thoma Bravo

“Proofpoint has established itself as a true powerhouse in the cybersecurity sector due to its innovative suite of market-leading products and impressive customer base of leading companies around the world. As the sophistication of cyberattacks continues to increase, Proofpoint is delivering the most effective solutions to help organizations protect their data and people across digital platforms. We look forward to partnering with the talented Proofpoint team and leveraging Thoma Bravo’s significant security and operational expertise to help accelerate the company’s growth.”

— Chip Virnig, a Partner at Thoma Bravo

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.