Waterloo tech firm Magnet Forensics offered to U.S. agency Thoma Bravo for $1.8B

WATERLOO — Waterloo tech agency Magnet Forensics says it’s being acquired and brought personal by U.S. personal fairness agency Thoma Bravo in a deal price about $1.8 billion.

In a launch Friday, Magnet mentioned the deal quantities to a 15 per cent premium on the closing share worth reached Thursday and a 41 per cent premium on its 90-day common.

It’s additionally about 160 per cent larger than the preliminary supply worth of $17 a share when the corporate went public and shares started buying and selling on the Toronto Inventory Trade in 2021.

Magnet’s shares jumped practically 14 per cent Friday on the information, closing at $43.66. Magnet shares reached an all-time excessive of about $57 in September 2021.

Communitech referred to as the deal “the largest exit in Waterloo Area tech historical past.”

Within the settlement with Thoma Bravo, subordinate voting shareholders and their associates will obtain $44.25 in money per share, whereas rolling shareholders — which embrace founder and chief expertise officer Jad Saliba, chief government officer Adam Belsher, and Magnet board chair and former BlackBerry chief government Jim Balsillie — will obtain $39 per share.

Based in 2010 by Saliba, a former Waterloo Regional Police officer, Magnet Forensics develops digital forensics software program for police, governments and personal firms that recovers, analyses and manages proof from computer systems, telephones, the cloud and different digital units.

Thoma Bravo, one of many world’s largest software program traders, mentioned it plans to mix Magnet Forensics with Grayshift LLC, a supplier of cellular system digital forensics Thoma Bravo purchased in July.

Saliba and Belsher will maintain management positions within the new firm, together with Grayshift founders David Miles and Braden Thomas. Balsillie will serve on the board of the mixed firm.

It wasn’t identified Friday if the deal would have every other direct impacts on Magnet staffing or operations at its Canadian and worldwide places of work. In September, the corporate mentioned it anticipated to have 500 staff by the tip of 2022.

“We consider the mixture of Magnet and Grayshift will unlock large worth for our clients by additional integrating and increasing our product suite which can end in extra seamless workflows within the restoration and evaluation of crucial digital proof to investigations and in the end contribute to our shared mission of the pursuit of justice,” Belsher mentioned in a launch.

Merging Magnet and Grayshift “presents probably the most compelling worth creation for all our stakeholders,” he mentioned.

“Since early in Grayshift’s historical past, Magnet Forensics has been a trusted and strategic accomplice,” Miles mentioned. “Bringing Magnet and Grayshift collectively will speed up innovation and in the end rework digital investigations.”

Hudson Smith, a accomplice at Thoma Bravo, mentioned the complementary capabilities of the 2 companies will create a frontrunner within the digital forensics and cybersecurity sector.

“Digital proof is an more and more crucial facet of investigations and the mixed firm will likely be well-positioned to additional market enlargement, speed up innovation, and supply even better options to its clients,” Smith mentioned within the launch.

“We stay up for leveraging Thoma Bravo’s deep trade, operational and funding experience to assist the mixed firm seize the large development alternatives forward.”

Magnet’s preliminary public providing in 2021 was valued at simply over $100 million. On the time, the corporate mentioned IPO proceeds can be used to strengthen its monetary place and advance development methods.

Third-quarter outcomes, launched in November and reported in U.S. {dollars}, confirmed income of $25 million within the quarter, up 41 per cent year-over-year, with web earnings of $1.4 million, in comparison with $2.2 million within the third quarter of 2021.

Magnet predicted it will finish 2022 with revenues of $96 to $98 million, representing development of between 37 and 39 per cent over 2021.

Since going public, Magnet has introduced various expansions and acquisitions, together with an enlargement into Australia final fall, the acquisition of cybersecurity software program agency Comae Applied sciences final spring, and the acquisition of Colorado-based DME Forensics in 2021.

With recordsdata from The Canadian Press

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