The integrated security awareness training platform, KnowBe4, has agreed to go private in a $4.6 billion deal with Vista Equity Partners. The platform is preparing to offer values of each share at $24.90 and had a 44% higher chance of the stock pre-bid on September 16, 2022.
The company’s share almost doubled since the announcement, with 12.5% being the last number in premarket trading. Before Vista’s proposal, KnowBe4 had nearly lost a quarter of its value in 2022. However, the acquisition announcement has increased the share price to $24.28. The deal between the two companies is expected to close in the first half of 2023 and will be financed via a mix of debt and equity.
KnowBe4 goes private
Tier 1 companies have increasingly utilized cybersecurity firms, and big tech tycoons seem to be more interested in platform-based companies after the hybrid working environment started.
According to Reuters, KnowBe4 was previously advised by Morgan Stanley & Co LLC, also serving as a financial advisor to KnowBe4’s special committee. The Guggenheim Securities LLC was also serving Vista as the financial advisor.
The acquisition didn’t occur until KnowBe4 lost its value in 2022, and several firms started bidding over the company shares as they were at an all-time low. It only makes sense that companies will acquire shares from companies at the bay of losing their stock value, which seems to be the case with KnowBe4 and Vista Equity Partners. The rise of hybrid work has also made cybersecurity firms attractive acquisition partners in the security sector.
The $24 per share offer reflects a price increase of about 39% over KnowBe4’s closing price on September 16. As of the most recent closing, its shares had almost lost a quarter of their value this year.
KnowBe4, as a platform, offers security awareness training that includes simulated phishing attacks and other basic cybersecurity hygiene practices. According to Cowen analysts, the company’s focus on an expanding “must-have ” area from an enterprise viewpoint makes it appealing.
KnowBe4, whose shares increased by 25% early Monday, announced that a special committee had been assembled to examine the offer. The bid from Vista comes amid a string of large investments by the Austin, Texas-based fund this year. The firm has struck 21 deals so far, including the $16.5-billion acquisition of cloud services firm Citrix Systems in January, according to investments tracker Tracxn.