The Deal: Thoma Bravo Lands Tripwire
Last May Tripwire filed to raise up to $86.25 million via an initial public offering. About a year later, after posting a 16% revenue growth, it initiated adual-track process, seeking M&A alternatives while prepping its IPO, filings showed. The company announced the sale Thursday but did not disclose the purchase price.
Thoma Bravo was ultimately able to make an offerat terms that trumped an IPO exit for Tripwire’s group of venture backers, which first invested in the security software company at its inception in 1997, Robert Sayle, vice president at Thoma Bravo, said in an interview.
“A sponsor like ourself is willing to pay a healthy price for a company like Tripwire and [investors] realized that the speed of exit … was ultimatelymore attractive than going through a public offering,” Sayle said. “It does appear to be one of the landmark transactions out of Oregon.”
Sayle made his comments amid recent news reports that pegged the acquisition as one of the largest in Oregon in the past 10 years.
Thoma Bravo entered the picture more than two years ago, and its only competition was a potential public offering, Sayle said.
“Largely speaking, this was a proprietary deal,” Sayle said. Sayle declined to comment on specific terms of the transaction, but said it was not as leveraged as it could have been, so there is capacity for additional debt to support acquisitions.
Thoma Bravo has no plan to combine Tripwire with any of the 18 software investments it is managing. This is Thoma Bravo’s fourth deal in the security sector.
For 2010 Tripwire generated revenue of $86.23 million, 16% more than the previous year, with adjusted Ebitda of $8.94 million, down 9%.
The investors reaping the windfall from the exit include: Waltham, Mass.-based technology investor Advanced Technology Ventures, run by Steven Baloff, with 21.95%; Silicon Valley-based investor Institutional Venture Partners, with 9.94%; and Larchmont, N.Y.-based Bessemer Venture Partners, with 9.87%. A fund of San Francisco secondary market investor Industry Ventures LLC owned 5.77% prior to the sale.
The acquisition is expected to close by the end of May, according to the announcement. Tripwire will continue to operate as an independent entity, and current CEO Jim Johnson will stay on.
Tripwire has more than 5,700 customers in 94 countries, serving 46% of Fortune 500 companies, with 350 employees, the company said.
Seth Boro, a newly promoted partner at Thoma Bravo, led the investment team for the San Francisco- and Chicago-based private equity firm, according to a spokesman.
J.P. Morgan Securities LLC‘s Sanjay Jain and Will Thiessen advised Tripwire, and Perkins Coie LLP served as legal counsel. Kirkland & Ellis LLP corporate partners Gerald Nowak and Jared Jensen, associate William Benitez, and IP partners Stephen Johnson and Karen Spindler represented Thoma Bravo.