Four years after going public, data security provider Barracuda Networks is headed private in a $1.6 billion buyout deal with Thoma Bravo. The $27.55 per share offer represents a 17 percent premium from Barracuda’s closing price last Friday.
Once the parties complete the transaction -- slated to close by the end of Barracuda’s fiscal year on February 28, 2018 pending shareholder and regulatory approval -- the Campbell, CA-headquartered company will operate as a privately-held provider of email security, network and application security and data protection services. Barracuda’s board of directors has already nodded its approval of the acquisition.
The Chicago and San Francisco-based Thoma Bravo is an active player in technology company buyouts, with MSP-led vendors Continuum and Solarwinds already featured in a lineup that lists Compuware, Flexera, McAfee, Riverbed and the data analytics firm Qlik, which it bought for $3 billion last year, among its 32 holdings.
Barracuda, which positions itself as a single source provider of managed security and backup solutions, competes with Palo Alto Networks and Symantec. The vendor claims 150,000 customers and working agreements with some 2,400 MSPs. In September, it rebranded its dedicated MSP business acquired from Intronis two years ago to Barracuda MSP, signaling a transition from a VAR-led outfit to one fully engaged with MSPs.
The Chelmsford, MA-based unit is ranked 98th in MSSP Alert’s Top MSSPs for 2017.
“We believe the proposed transaction offers an opportunity for us to accelerate our growth with our industry-leading security platform that’s purpose-built for highly distributed, diverse cloud and hybrid environments,” said BJ Jenkins, Barracuda CEO, in a statement. “We will continue Barracuda’s tradition of delivering easy-to-use, full-featured solutions that can be deployed in the way that makes sense for our customers.”
Seth Boro, a managing partner at Thoma Bravo, said Barracuda's cybersecurity portfolio keyed the acquisition. "We believe that Barracuda is at the forefront of innovation in several highly strategic areas of the cybersecurity market and are excited to be the company's partner in the next phase of its growth,” he said.
With the deal Thoma Bravo not only gains Barracuda’s technology but also its forwarding looking view of MSPs as providers of a medley of network security, cloud-based backup, disaster recovery and business continuity (BC/DR) services. Indeed, in a blog post written a year ago, Brian Babineau, Barracuda MSP’s senior vice president and general manager, wrote that MSPs have an “increased appetite” for security, and while BC/DR has always been “top of mind” for them, the impetus has changed with the rise in cyberattacks.
“It reaffirms that we’re on the right track and that our vision for a complete solution is resonating with MSPs,” he said at the time.
Barracuda’s stock worth has shrunk significantly since hitting a high of $42.12 in April, 2015. Co-founder and Director Michael Perone sold $1.8 million of shares in late September, part of an insider stock sell off that has seen insiders sell $36.4 million worth of shares, or nearly 3 percent of Barracuda's market cap, in the last two months, SeekingAlpha reported.
However, in spite of a four-year long decline in revenue growth, the company’s profitability has increased, the report said.