Summary List Placement
Thoma Bravo has just cut one of the largest-ever checks by a private equity firm to fund its $12.3 billion purchase of cybersecurity company Proofpoint.
The firm, known for its investments in software and technology, has funded the buyout with approximately $8 billion in equity, according to sources familiar with the deal.
Goldman Sachs, which advised Thoma Bravo and provided financing for the purchase, is expected to raise at least $3 billion from the debt capital markets to support the acquisition. This is likely to be funded through the high-yield bond and leveraged loan markets, sources said.
The agreement marks the largest buyout of a software company by a private equity firm, beating Hellman & Friedman’s acquisition of Ultimate Software in February 2019.
Spokespersons for Thoma Bravo and Goldman declined to comment.
Thoma Bravo will pay Proofpoint shareholders $176 per share, according to the firm’s announcement of the deal last week. Proofpoint’s board and its advisors have until June 9, 2021, to weigh competing bids from other potential buyers.
The acquisition is the latest in a string of tech-related purchases by Thoma Bravo, which is doubling down on a sector adorned with strong valuations, as remote work solutions and demand for increasingly efficient technology grows.
Thoma Bravo scored a $2.3 billion loan from asset manager and direct lender Owl Rock to support its purchase of fintech Calypso Technology, Insider reported last month.
The private equity shop also closed its roughly $10.2 billion acquisition of real estate software and data analytics provider RealPage last month. Goldman led a $3.75 billion debt financing in the leveraged loan market in February backing the acquisition of Realpage, sources said.
Debt capital markets, meanwhile, are well-positioned to absorb an anticipated uptick in acquisition-linked financing opportunities. Cash-rich investors are keen to put money to work on M&A opportunities that typically garner higher returns, while bankers will want to take advantage of the low interest rates so their private equity clients can raise debt while borrowing costs remain low.
Large acquisition financings, including a roughly $5.3 billion deal supporting Allied Universal’s purchase of security company G4S is being pitched to investors this week, while retailer Michaels and property tech unit CoreLogic raised near $10 billion of fresh debt collectively in April.
Globally, the high-yield bond market has already raised about $277 billion this year, significantly higher than the $149 billion raised in the first four months of 2020, Refinitiv data showed.
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Source:: Businessinsider – Finance
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