Reports indicate that Thoma Bravo’s acquisition of security firm Barracuda Networks Inc (NYSE:CUDA) will be backed by a loan package worth $835 million. The transaction will be an all-cash deal and will put the market value of Barracuda at approximately $1.5 billion. With Thoma Bravo acquiring the company at a price of $27.55 a share, this will be a premium of 22.5%.
The loan package will consist of a revolving credit facility worth $75 million and a secured term loan worth $555 million. There will also be an additional secured term loan of $205 million. Syndication of the debt will be led by Goldman Sachs while UBS and Credit Suisse will offer commitments.
Additionally equity worth $774 million will support the transaction bringing the total capitalization to $1.534 billion. With the debt the EBITDA of Barracuda Networks will become to approximately five times via the senior loan. The EBITDA will be 6.9 times via the junior loan.
The deal comes four years following the IPO of Barracuda Networks which manages the data security of clients through subscriptions via the cloud. Some of its rivals include Symantec Corporation (NASDAQ:SYMC), Proofpoint and Palo Alto Networks Inc (NYSE:PANW).
Once and if the deal closes Barracuda will operate as a company that is privately held and will continue its focus on data protection services and email security. As a private equity firm billions have been spent by Thoma Bravo in acquiring a couple of listed technology and software firms such as Compuware, SolarWinds, Riverbed Technology and Qlik Technologies.
Acting as the financial adviser to Barracuda Networks during the negotiations will be Morgan Stanlet while UBS Investment Bank, Credit Suisse and Goldman Sachs will act as the advisers of Thoma Bravo. Legal counsel for Barracuda Networks will be offered by Wilson Sonsini Goodrich & Rosati, Professional Corp while Thoma Bravo will be served by Kirkland & Ellis LLP.
According to BJ Jenkins, Barracuda Networks’s CEO, the deal will help in accelerating growth.
“We believe the proposed transaction offers an opportunity for us to accelerate our growth with our industry-leading security platform that’s purpose-built for highly distributed, diverse cloud and hybrid environments,” Jenkins said in a statement.
On Tuesday shares of Barracuda Networks Inc rose by 0.18% to close the day at $27.64.