Software and business services private equity firm Thoma Bravo LLC will acquire California-based Keynote Systems Inc., a leading Internet and mobile cloud testing company, for roughly $395 million, Keynote announced Monday.
Thoma Bravo has agreed to pay Keynote stockholders $20 per share, a 48 percent premium to the company's closing price on the Nasdaq Stock Exchange Friday. The New York-based private equity house will fund the acquisition entirely in cash.
"Keynote is the established leader in the Internet and mobile testing and monitoring market and is currently at the forefront of a very compelling macro environment," Thoma Bravo managing partner Orlando Bravo said in a statement.
Keynote is a global market leader in performance monitoring and testing infrastructure services for Internet and mobile devices. The San Mateo, Calif.-based company collects more than 700 million mobile and Internet performance measurements daily using 7,000 data-gathering devices in roughly 275 locations worldwide, according to its website.
Umang Gupta, Keynote's chairman and CEO, said in a statement that the board of the online data company wholeheartedly supports the proposed deal.
"We believe becoming a private company will provide additional flexibility and better position us to strategically invest in our nascent mobile enterprise business, further our sales programs and accelerate the next stage of the company's growth and industry market leadership," Gupta said. "We look forward to working closely with Thoma Bravo and all parties to complete this transaction."
The deal is subject to approval by regulators and Keynote stakeholders. The acquisition is expected to close by the end of September, the companies said. Gupta and the rest of Keynote's senior management are likely to remain with the company, which will continue to be run out of its San Mateo headquarters.
The deal is not subject to a financing condition, according to Monday's release.
"The increasing complexity of websites combined with the proliferation of mobile devices is creating new markets for the company's enterprise business, while the real-time shift to 4G and LTE networks will continue to benefit its mobile telecom business," Orlando Bravo said. "Thoma Bravo is excited to partner with Keynote to accelerate the growth of the company through our proven buy-and-build strategy."
Shares of Keynote opened up 47 percent at $19.86 and held steady at $19.84 early Monday afternoon on the Nasdaq, slightly below Thoma Bravo's offer price.
Thoma Bravo is a New York-based global private equity firm with more than $4 billion in assets under management. The firm generally invests in companies in the application and infrastructure software and financial and business services industries.
Last month, Thoma Bravo portfolio company Blue Coat Systems Inc. agreed to acquire Solera Networks, a leading provider of big data security intelligence and analytics for advanced threat protection.
Thoma Bravo is represented by Kirkland & Ellis LLP, led by partners Gerald Nowak and Theodore Peto.
Counsel information for Keynote was not available Monday.
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