SonicWall directors have accepted a $717 million offer to sell the company to a group headed by Thoma Bravo, LLC, a private equity investment firm with the aim of growing the company faster and developing products quicker than it could as a public company.
The security appliance company is profitable and growing -- its earnings last quarter were 17% higher than for the same quarter last year -- but with the security appliances industry consolidating, it needs to grow faster, says Patrick Sweeney, vice president of product management for SonicWall. The company has $200 million in cash as well, he says.
If approved by shareholders, the deal will enable faster development of the company's next big product push called Super Massive, a jump to 10Gbps speeds for its unified threat management hardware with all the security features turned on, he says. "It's important for us to grow as fast or faster than the market," he says. "This will allow us to build a larger company a lot faster."
Size is important because the industry is consolidating, he says, pointing to HP's purchase of 3Com and its security devices division Tipping Point, making smaller companies more vulnerable.
As a public company, SonicWall's goals were constrained to ever increasing 90-day demands between fiscal reporting quarters, which limits longer term investments that can alter a company's strategic course, he says.
SonicWall, which makes unified threat management, firewall, VPN and backup appliances as well as endpoint security, e-mail security and antispam software, says the deal will buy out current shareholders for $11.50 per share in cash, which is 63% more than the stock is going for publicly. Stockholders still have to approve the deal, and that is expected by early in the fourth quarter of this year.
Thoma Bravo, which uses the tag line "buy and build" owns other high-tech assets including security management firm Attachmate, application and database-tool vendor Embarcadero Technologies and secure authentication experts Entrust.