Thoma Bravo, the non-public fairness and progress capital agency, at present introduced that it could spend $1.8 billion CAD (~$1.34 billion) to amass Magnet Forensics, a Waterloo-based firm making software program utilized by protection forces and companies to analyze cybersecurity threats.
Magnet Forensics might be bought by a newly created company managed by Thoma Bravo, Morpheus Purchaser Inc., which can pay Magnet Forensics shareholders a 15% premium over Thursday’s closing worth on the Toronto Inventory Trade. Publish-buy, Morpheus might be merged with cellular machine forensics outfit Grayshift, which Thoma Bravo acquired majority management of final July.
The transaction is anticipated to shut by Q2 2023, topic to shareholder and different customary approvals.
“We stay up for bringing collectively the complementary capabilities of Magnet and Grayshift to create a pacesetter within the digital forensics and cyber safety area,” Thoma Bravo associate Hudson Smith mentioned in a press launch. “Digital proof is an more and more vital facet of investigations and the mixed firm might be well-positioned to additional market enlargement, speed up innovation and supply even better options to its prospects.”
Launched in 2010, Magnet Forensics develops digital investigation software program that acquires, analyzes, studies on and manages proof from computer systems, cellular gadgets, Web of Issues gadgets and cloud providers. The corporate was based by Jad Saliba, a Waterloo regional police constable who labored within the police drive’s high-tech crimes unit. After incubating Magnet Forensics’ software program on the unit, Saliba determined to strike out on his personal and promote the tech for a licensing payment, partnering with Jim Balsillie and Adam Belsher, then BlackBerry executives.
Earlier than going public, Magnet Forensics attracted an funding from In-Q-Tel, the nonprofit enterprise arm of the U.S. intelligence neighborhood. The corporate claims that its software program is utilized by greater than 4,000 private and non-private sector prospects — e.g. police forces, intelligence businesses, tax officers, border guards and militaries — in over 100 nations, serving to investigators shield property and guard nationwide safety.
Enterprise was booming previous to the acquisition (granted, Thoma Bravo first submitted a proposal early final October). Throughout its Q3 2022 earnings name, Magnet Forensics reported that annual recurring income elevated 50% year-over-year to achieve $80.9 million whereas EBITDA — earnings earlier than curiosity, taxes, depreciation and amortization — climbed 25% to $5.9 million.
Magnet benefited from the increasing marketplace for digital forensics, which is anticipated to develop from $5.8 billion in 2022 to $10.9 billion in 2028, in keeping with a latest Imarc report.
Adam Belsher, who serves as Grayshift’s CEO, says that the mixture of Grayshift’s cellular entry and extraction capabilities and Magnet’s digital investigation suite will place the merged companies strongly — permitting prospects to higher extract, course of, look at, collaborate on and handle digital forensic proof.
“We imagine the mixture of Magnet and Grayshift will unlock great worth for our prospects by additional integrating and increasing our product suite which can lead to extra seamless workflows within the restoration and evaluation of vital digital proof to investigations and in the end contribute to our shared mission of the pursuit of justice,” Belsher mentioned in an announcement. “We stay up for partnering with Thoma Bravo and Grayshift to construct upon our digital investigation suite to additional innovate and proceed to serve a rising variety of organizations and use instances.”
For Thoma Bravo, which now has an estimated greater than $114 billion in property underneath administration, Magnet Forensics is the most recent in a collection of high-profile software program enterprise purchases. In 2022, the agency spent billions of {dollars} shopping for cybersecurity startups Ping Identification, Sailpoint, ForgeRock, Bottomline Applied sciences and Coupa Software program.
