Network security company Infoblox has agreed to be taken private by Vista Equity Partners for $1.6 billion, continuing a recent surge in software and IT acquisitions by private-equity firms.
Vista said Monday it will pay $26.50 per Infoblox share, which represents just over a 16% premium to the closing price on Friday and a more than 73% premium to the price before media outlets reported in mid-May that Infoblox had received a takeover offer from Thoma Bravo, another PE firm.
The deal is Vista’s third “take-private” acquisition of 2016, following its $1.6 billion purchase of Cvent, a provider of cloud-based event management software, in April and $1.8 billion purchase of marketing software giant Marketo in May.
“As all industries are moving to the cloud in record speed, and as connected devices proliferate, companies depend more than ever on network automation and security,” Brian Sheth, Vista’s co-founder and president, said Monday in a news release, adding that Infoblox’s “portfolio of secure automated networking solutions make the company uniquely positioned to deliver for its customers.”
Infoblox lost $14 million on $358 million in revenue for the fiscal year ending July 31, 2016. Its shares traded as high as $40 a share in 2013 and above $27 a share in mid-2015, but fell into the mid-to-high teens entering 2016.
“That depressed valuation, coupled with Infoblox’s net cash position, its high gross margins and cash flows from operating activities, appear to be an opportunity for value-seeking hedge fund and PE buyers alike,” Fortune said.
In mid-April, activist hedge fund Starboard Value disclosed a 7.1% activist stake in Infoblox, built between February and April at prices between $14 and $17 a share. Another hedge fund, Hound Partners, will also see a big payday after acquiring 7% of Infoblox.
“Vista has an excellent track record of supporting and adding value to technology companies, and we are thrilled to bring on a partner of their caliber and strategic expertise,” Infoblox CEO Jesper Andersen said.