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Security vendor Proofpoint snapped up by private equity for $12.3bn but still in search of profit

Thoma Bravo follows Sophos purchase with further infosec landgrab

Proofpoint has become the latest sizable tech vendor to succumb to private equity after Thoma Bravo succeeded in its $12.3bn grasp for the infosec giant.

Shareholders are set to get $176 per share in cash, 34 per cent more than Proofpoint's closing share price on 23 April, according to bid details.

CEO Gary Steele said now was the time for Proofpoint, which IPOed in 2012, to return to private ownership. The move would allow the firm to be "even more agile with greater flexibility to continue investing in innovation, building on our leadership position and staying ahead of threat actors."

Of course it also means that the company can make moves outside of the glare of Wall Street moneymen and their quarterly expectations.

$35bn private equity firm Thoma Bravo has form when it comes to slurping computer security vendors. In February 2020, it bought British encryption and antivirus outfit Sophos for £3bn. It also owned certificate specialist Entrust (which it later sold to Datacard); it also has a stake in security software firm McAfee; and equity in identity and access management vendor SailPoint.

Eric Hahn, former Netscape CTO, founded Proofpoint in June 2002, and helped launch the company the following year, having raised $7m in a Series A funding round. It was initially backed by venture capitalists Benchmark Capital and by Stanford University. In 2012, the company's IPO raised more than $80m.

In its first-quarter results for 2021, Proofpoint announced revenue of $287.8m, up 15 per cent on the first quarter of 2020. Gross profits were $214.3m, up from $180.8m year-on-year. However, it posted an operating loss $42.1 for the same period, not much changed from a year earlier.

In 2018, its credentials were dented somewhat when Mimecast research pointed out that its servers – along with Microsoft's – missed malware attachments, impersonation, and malicious links in 15,656 emails from a sample of 142 million. ®

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