Websense’s board of director accepted a bid from private equity firm Vista Equity Partners to take the company private.
The cash-for-stock acquisition is worth approximately $902.88 million, according to a Websense statement earlier this week. Under the terms of the agreement, Vista will pay $24.75 for each share of Websense stock held by investors. The offer price is 29 percent more than the stock’s closing price on May 17, and 53 percent more than the average closing price of the stock over the past two months.
Even after the company becomes privately-held, Websense senior management is expected to remain with the company. The headquarters are also expected to remain in San Diego.
“Vista shares a similar vision for the company, including a dedication to developing and delivering best-in-class cyber-security to our customers,” Websense CEO John McCormack said. The private equity firm invests in software, data, and technology-focused businesses.
Websense would be able to tap into Vista’s “operational discipline” to continue to invest in business and technology innovation, McCormack said.
Websense’s TRITON platform filters Web content. Organizations install the software on employee devices to block users from accessing certain types of Websites, such as pornography and Facebook. The company also combines email and data leak prevention (DLP) with Web security. TRITON is available on-premise, in the cloud, or as a hybrid deployment.
“We are impressed with Websense’s market-leading product suite and the compelling value proposition it offers to its customers,” Robert F Smith, CEO and founder of Vista Equity Partners, said in the statement.
“It’s hard to see a downside” for customers, Rich Mogull, analyst and CEO of analyst firm Securosis, wrote on the Securosis blog. While it is possible Vista may decide to focus on sales and channels while totally neglecting product and technology, “they would be idiots to take that approach,” he said, adding that “odds are good for the product continuing to improve and remaining competitive.”
“Our top priority continues to be protecting organizations from data theft and the latest advanced cyberattacks. To that end, delivering an exceptional customer experience, through the innovative TRITON platform, is paramount,” McCormack wrote on the company’s Insights blog Thursday.
The deal is expected to close before the end of September, subject to standard closing conditions.
Websense is just one of several security companies choosing to return to private management. Thoma Bravo took SonicWall private in 2010 for $717 million before selling to Dell in a deal valued more than $1 billion. Thoma Bravo also scooped up Blue Coat Systems for $1.3 billion. Blue Coat announced it would acquire Solera Networks earlier this week.
Financially, Websense has struggled this year, with first quarter sales slipping to $87 million, from $89 million over the same quarter in 2012, and profits plunged to $2.74 million, compared to last year’s $9.8 million. The company has been “languishing” for the last few years because of “serious execution failures” in sales and channel strategy, Mogull said.
“This deal gives them a chance to make the required changes without worrying about quarterly sales goals,” Mogull said.