Potential KnowBe4 Buyout: Will More Bidders Counter Vista Equity Acquisition Offer?

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KnowBe4 has received an unsolicited buyout offer from private equity firm Vista Equity Partners, the cybersecurity company has disclosed. Vista Equity has bid $24 per share to buy KnowBe4.

The per-share disclosure tells potential suitors where to start the bidding if they’d like to jump into the process, MSSP Alert believes. Still, it’s unclear whether more bidders for KnowBe4 will emerge, and an actual buyout may require a bid of $28 to $30 per share, according to Truist, SeekingAlpha reported.

Amid the M&A chatter, KnowBe4 shares were trading at about $21.97 as of September 23, 2022 — which gives the company a $3.84 billion market cap.

KnowBe4 Cybersecurity Business Background, Channel Partner Program

KnowBe4 is best known for its cybersecurity awareness training platform. The company, based in Clearwater, Florida, has 1,694 employees listed on LinkedIn as of September 23, 2022.

KnowBe4 launched a successful IPO in April 2021. Fast forward to mid-2022, and the company’s Q2 revenue was $80.8 million, up 36.1% compared to Q2 of 2021. Fully 88% of KnowBe4’s customers are in the SMB market (defined as organizations with less than 1,000 employees) and 12% are in the enterprise space, the company said in August 2022.

On the channel front, KnowBe4 continues to “make meaningful progress on hiring key resources in our channel team and building marketing and distribution capabilities for our channel partners,” CFO Bob Reich said during the company’s August 2022 earnings call. Still, the company did not disclose specific channel partner metrics. It sounds like most of the channel partner push is outside of the United States. KnowBe4 has been known to suffer some channel conflict within the U.S., according to MSSP Alert readers.

Key KnowBe4 company moves for 2022 include launching:

Next up, the company is preparing to launched  SecurityCoach — which is based on the SecurityAdvisor acquisition of 2021. The product will allow customers to “identify and remediate unsecure actions in real time through connections with our customers’ existing security stack,” KnowBe4 asserts. SecurityCoach was in closed beta testing in August 2022, and on track for general release during the fourth quarter.

Vista Equity Partners: Example Private Equity Investments

Meanwhile, Vista Equity Partners has considerable experience in the cybersecurity and data protection markets. Some of the acquisitions and investments have involved MSP-friendly companies. Example deals include:

Within MSP circles, Vista Equity is best known for acquiring, building and then selling Datto to Kaseya.

Additional private equity firms with the scale to potentially acquire KnowBe4 include Thoma Bravo and Insight Partners, though we don’t know if those firms plan to bid for the cybersecurity company.

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