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Funding/M&A

ZeroFox to be Taken Private in $350 Million Deal

ZeroFox agrees to be acquired by PE firm Haveli Investments for $350 million and become a privately held company.

Cybersecurity firm ZeroFox (Nasdaq: ZFOX), which markets itself as a provider of “external cybersecurity solutions”, has entered into a definitive agreement to be acquired by Haveli Investments, a tech-focused private equity firm, in an all-cash transaction with an enterprise value of roughly $350 million.

ZeroFox began trading on the Nasdaq in August 2022, following a special purpose acquisition company (SPAC) deal that combined ZeroFox with incident response services firm IDX.

Under the terms of the agreement, ZeroFox shareholders will receive $1.14 per share in cash upon completion of the transaction.

The announcement does not mention any “go-shop” period in which ZeroFox could receive other acquisition proposals, something that will not please ZeroFox shareholders hoping to fetch a higher price tag on the firm that was valued at roughly $1.4 billion when announcing that it would become a public company.

“The sales price of $1.14 per share is well below ZeroFox’s 52-week high of $3.49 per share,” noted law firm Wohl & Fruchter, which is investigating the fairness of the deal to shareholders.

“A special committee of the ZeroFox board conducted a thorough evaluation of capital structure alternatives, which included multiple discussions and interactions with a number of financial and strategic partners,” Todd Headley, Lead Independent Director of the ZeroFox Board of Directors, said in a statement. “During this comprehensive process it became clear that partnering with Haveli Investments was the best path forward for customers, employees, and maximizing stockholder value.”

“We are investigating whether the ZeroFox Board acted in the best interests of ZeroFox shareholders in approving the sale,” explained Joshua Fruchter, a founding partner of Wohl & Fruchter. “This includes whether the members of the Special Committee were truly independent, whether the price agreed upon is fair to ZeroFox shareholders, and whether all material information regarding the transaction has been fully disclosed.”

The transaction is expected to close in the first half of 2024 and is not subject to a financing condition.

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ZeroFox was founded in 2013 by Chris Cullison, Evan Blair, Hillary Herlehy (chief people officer), James Foster (CEO), and Robert Francis.

Upon completion of the transaction, ZeroFox’s common stock will no longer be publicly listed on Nasdaq and ZeroFox will become a privately held company.

Written By

For more than 15 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.

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