KKR to Acquire Barracuda Networks

Rhea-AI Summary

KKR has signed a definitive agreement to acquire Barracuda Networks, a leader in cybersecurity solutions, from Thoma Bravo. The transaction aims to accelerate Barracuda's growth, offering cloud-first security solutions to over 200,000 customers across various industries. KKR plans to enhance Barracuda's operational capabilities and support its expansion into key areas of cybersecurity. While the financial terms remain undisclosed, the deal is expected to close by the end of the year, subject to customary conditions.

Positive

• KKR's acquisition aims to further accelerate Barracuda's growth, enhancing its cybersecurity offerings.
• Barracuda has achieved over $500 million in revenue due to previous strategic expansions and acquisitions.
• KKR plans to invest in key growth areas, including managed detection and response and secure access service edge technology.
• The deal will involve a broad-based employee ownership program aimed at increasing engagement and performance.

Negative

• None.

Acquisition from Thoma Bravo to further accelerate growth of leading cybersecurity software provider

NEW YORK & SAN FRANCISCO--(BUSINESS WIRE)-- KKR, a leading global investment firm, today announced the signing of a definitive agreement under which KKR’s investment funds will purchase Barracuda Networks Inc. (“Barracuda” or “the Company”), a leading provider of cloud-first security solutions, from Thoma Bravo, a leading software investment firm. Financial terms were not disclosed.

Founded in 2003, Barracuda offers a broad suite of cybersecurity solutions across email protection, application security, network security and data protection that can be deployed and managed in both cloud and hybrid environments. The Company focuses on serving small and medium sized enterprises (SMEs) and has more than 200,000 customers worldwide across a variety of industries, including education, government, financial services, health care, retail, consumer goods and manufacturing.

During Thoma Bravo’s ownership, Barracuda expanded and enhanced its product suite, implemented best-in-class operational processes and successfully executed a number of strategic acquisitions, which together propelled the Company to profitable and accelerating growth at over $500mm of revenue and enabled more customers to comprehensively protect their employees, applications, networks and data. KKR will provide resources and expertise to further accelerate the Company’s growth and support its strategic expansion in key areas, including managed detection and response, extended detection and response, and secure access service edge technology.

Barracuda will implement KKR's broad-based employee ownership program, which makes all employees owners in their respective businesses alongside KKR. This strategy is based on the belief that employee engagement is a key driver in building stronger companies. Since 2011, KKR has awarded billions of dollars of total equity value to over 45,000 non-management employees across more than 25 companies.

“We believe that with the support of KKR, we will continue to invest in growth and foster a culture that gives our team the resources and inspiration to continue to create and deliver the next generation of leading cybersecurity solutions for our customers and partners,” said Hatem Naguib, CEO of Barracuda. “We are very appreciative of Thoma Bravo’s support and very excited to be working with KKR on this next phase of Barracuda’s journey.”

“We continue to see cybersecurity as a highly attractive sector and are excited to back a clear leader in the space,” said John Park, Head of Americas Technology Private Equity at KKR. “Given its proven track record of growth and innovation, we believe that Barracuda has the right team and model to capture business in this growing market.”

“Barracuda has built an impressive portfolio of solutions that are helping SMEs around the world protect their data and address critical security challenges,” said Bradley Brown, Managing Director at KKR. ”We see a tremendous opportunity for long-term growth as these businesses continue to invest more in cybersecurity and we look forward to helping Barracuda scale and deliver next generation products that meet this growing need.”

“Over the course of Thoma Bravo’s four-year partnership, Barracuda has solidified its position as an industry leader in cloud-first cybersecurity software,” said Seth Boro, a Managing Partner at Thoma Bravo. “From multiple acquisitions to backend improvements, Barracuda has delivered tremendous value to its customers and partners.”

“We are proud to have supported Barracuda to innovate and grow its security solutions portfolio, expand its customer base and achieve considerable operational improvements and revenue growth,” said Chip Virnig, a Partner at Thoma Bravo. “We look forward to watching Barracuda’s continued success.”

The investment in Barracuda builds upon KKR’s experience investing in the cybersecurity sector globally, with investments including Ping, Cylance, DarkTrace, ForgeRock, NetSPI and Optiv, among others.

The transaction is anticipated to close by the end of the year, subject to customary conditions.

J.P. Morgan is serving as exclusive financial advisor to Thoma Bravo and Barracuda. Kirkland & Ellis LLP is serving as legal counsel to Thoma Bravo and Barracuda. Simpson Thacher & Bartlett LLP is serving as legal counsel to KKR. Guggenheim Securities, DBO Partners and Barclays are serving as financial advisors to KKR.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.

About Barracuda Networks

At Barracuda we strive to make the world a safer place. We believe every business deserves access to cloud-first, enterprise-grade security solutions that are easy to buy, deploy, and use. We protect email, networks, data, and applications with innovative solutions that grow and adapt with our customers' journey. More than 200,000 organizations worldwide trust Barracuda to protect them – in ways they may not even know they are at risk — so they can focus on taking their business to the next level. For more information, visit barracuda.com.

About Thoma Bravo

Thoma Bravo is one of the largest private equity firms in the world, with more than $103 billion in assets under management as of December 31, 2021. The firm invests in growth-oriented, innovative companies operating in the software and technology sectors. Leveraging the firm’s deep sector expertise and proven strategic and operational capabilities, Thoma Bravo collaborates with its portfolio companies to implement operating best practices, drive growth initiatives and make accretive acquisitions intended to accelerate revenue and earnings. Over the past 20 years, the firm has acquired or invested in more than 375 companies representing over $190 billion in enterprise value. The firm has offices in Chicago, Miami and San Francisco. For more information, visit www.thomabravo.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220412005856/en/

Media:

For Barracuda Networks:

Jonelle Elam

408-813-7762

jelam@barracuda.com

For KKR:

Julia Kosygina

212-750-8300

media@kkr.com

For Thoma Bravo:

Megan Frank

Thoma Bravo

mfrank@thomabravo.com

212-731-4778

Nicky Bryan

Finsbury Glover Hering

646-436-6126

Nicky.bryan@fgh.com

Source: KKR

FAQ

What is the significance of KKR's acquisition of Barracuda Networks?

KKR's acquisition is significant as it aims to bolster Barracuda's growth and enhance its cybersecurity product offerings for over 200,000 customers.

When is the KKR and Barracuda Networks deal expected to close?

The transaction is anticipated to close by the end of the year, pending customary conditions.

What areas will KKR focus on to support Barracuda's growth?

KKR plans to support Barracuda's growth in managed detection and response, extended detection and response, and secure access service edge technology.

How has Barracuda performed under Thoma Bravo's ownership?

Under Thoma Bravo, Barracuda expanded its product suite and achieved over $500 million in revenue, driving profitable and accelerating growth.