By Chibuike Oguh
(Reuters) -KKR is in advanced talks to buy cybersecurity firm Barracuda Networks from its private equity owner Thoma Bravo for around $4 billion, including debt, people familiar with the matter said.
California-based Barracuda, which manages the data security of its customers over the cloud on a subscription basis, was taken private by Thoma Bravo in 2017.
KKR declined to comment. Barracuda and Thoma Bravo did not immediately respond to requests for comment.
The deal is expected to be announced later on Tuesday, although the sources, who requested anonymity, cautioned that talks, which are confidential, could yet collapse.
Dealmaking in cybersecurity has jumped in recent months as the COVID-19 pandemic accelerated the shift to remote working, forcing companies to ramp up spending in the sector. Russia’s invasion of Ukraine has also led to a spike in cyberattacks.
Thoma Bravo on Monday agreed to buy cybersecurity firm SailPoint Technologies, while Datto, a security solutions provider, was also taken private in a $6.2 billion deal by investors led by Insight Partners.
Reuters reported in February that KKR was exploring a sale or an initial public offering for Optiv Security Inc, a U.S. cybersecurity solutions distributor and consultant it controls at a valuation of more than $3 billion, including debt.
Founded in 2003, Barracuda provides a range of security services and offerings, including email protection, software and cloud security, network security and data protection.
Thoma Bravo took the company private in an all-cash transaction valued at $1.6 billion in 2017, four years after it went public. Barracuda has since made a series of acquisitions, including buying extended detection and response service SKOUT Cybersecurity and zero trust access provider Fyde.
(Reporting by Chibuike Oguh in New York; Writing by Anirban Sen and Krystal Hu; Editing by Saumyadeb Chakrabarty, David Holmes and Alexander Smith)
Cybersecurity refers to the practice of protecting systems, networks, and programs from digital attacks. These attacks typically aim to access, change, or destroy sensitive information or disrupt normal business operations.
Private equity is a form of investment where funds are directly invested in private companies or used to buy out public companies, resulting in their delisting from stock exchanges. Investors seek to improve the company's performance before selling it for a profit.
A subscription-based model is a business strategy where customers pay a recurring fee at regular intervals for access to a product or service. This model is common in software, media, and various consumer services.
An acquisition occurs when one company purchases another company, gaining control over its assets and operations. This can be a strategic move to expand market share, diversify offerings, or achieve synergies.
Financial services encompass a wide range of services provided by the finance industry, including banking, investment, insurance, and asset management, aimed at managing money and providing financial products to consumers and businesses.
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