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KKR Snags Barracuda In $4B Deal Led By Simpson, Kirkland

KKR will buy cloud security and data protection company Barracuda Networks from fellow private equity firm Thoma Bravo, the companies said Tuesday, in a transaction that values the target at nearly $4 billion and was shaped by Simpson Thacher and Kirkland & Ellis.

Under the terms of the agreement, an affiliate of New York-based KKR & Co., advised by Simpson Thacher, will acquire San Francisco-headquartered Barracuda from Thoma Bravo LLC, both of which are represented by Kirkland & Ellis, according to a statement. Financial terms were not disclosed, but three sources familiar with the matter confirmed to Law360 on Tuesday the deal values Barracuda at almost $4 billion.

John Park, head of Americas technology private equity at KKR, said in Tuesday's statement the firm views cybersecurity as a "highly attractive sector" and noted that Barracuda is a "clear leader in the space."

Barracuda offers products and services including network and application firewalls, email archiving, information backup, and data compliance solutions. Its customer list is roughly 200,000 long, and comprises mostly small- and medium-sized enterprises, including in industries like education, government, financial services, health care, retail, consumer goods and manufacturing.

"We believe that with the support of KKR, we will continue to invest in growth and foster a culture that gives our team the resources and inspiration to continue to create and deliver the next generation of leading cybersecurity solutions for our customers and partners," said Hatem Naguib, CEO of Barracuda.

The acquisition by KKR comes less than five years after Thoma Bravo bought Barracuda back in November 2017, a deal that valued the business at $1.6 billion. Barracuda was represented in the 2017 deal by Wilson Sonsini Goodrich & Rosati PC.

About four years before that deal, in 2013, Barracuda made its debut on the New York Stock Exchange, with an initial public offering that raised about $75 million, according to a statement from the time. The company was originally formed in 2003, according to its website.

In Tuesday's statement, Seth Boro, a managing partner at Thoma Bravo, said that under its ownership, "Barracuda has solidified its position as an industry leader in cloud-first cybersecurity software."

The transaction is subject to customary conditions and is expected to be completed by the end of this year.

Thoma Bravo and Barracuda are represented by Kirkland & Ellis LLP as legal adviser, with J.P. Morgan acting as exclusive financial adviser.

The Kirkland team is led by corporate partners Corey Fox, Bradley Reed and Brett Nelson and associate Joel Varner, plus debt finance partners Brian Ford and Aaron Berlin.  

KKR is represented by Simpson Thacher & Bartlett LLP as legal adviser, with Guggenheim Securities, DBO Partners and Barclays acting as financial advisers.

The Simpson Thacher team includes M&A partners Marni Lerner and Ravi Purushotham, executive compensation and employee benefits partner David Rubinsky, tax partner Marcy Geller, and credit partner Adam Shapiro.