(Reuters) — Highly valued security firm Tanium Inc is allowing its co-founder, employees and some early investors to sell $100 million of stock to private equity and venture funds in a secondary sale that eases internal pressure for a public offering.
The deal values Emeryville-based Tanium at $3.75 billion after the transaction, Chief Executive Orion Hindawi told Reuters.
Half of the proceeds will go to his father, David Hindawi, co-founder and executive chairman of Tanium, who wants it to fund charitable efforts, Hindawi said.
The largest buyer is private equity firm Texas Pacific Group, with late-stage venture firm IVP and others taking smaller amounts of the common stock. Venture firm Andreessen Horowitz, which has put more than $100 million into Tanium in multiple rounds, is not buying or selling.
Hindawi said Tanium itself did not need the money, having $300 million in cash and positive cash flow, but wanted to allow longtime investors and employees to benefit from the company’s success without an IPO.
“I don’t want to feel compelled” to go public, he said.
Though Hindawi had been talking about a public offering this year only a few months ago, he said he reconsidered after other companies went public and were whipsawed by the markets.
He said that Tanium sales are doubling annually and that greater scale would make for steadier projections, removing volatility in the event of a later public stock offering.Tanium’s customers include major financial institutions, the Department of Defense and other large operations that install the company’s software on all of their computers to track what programs are running on them, with which security vulnerabilities, and rapidly install patches to those programs when they become available.
A number of senior executives have left in the past year, and media reports highlighted complaints about Hindawi’s management style and allegations by a handful of employees that they were fired just before their options vested.
Hindawi said a board investigation found no systematic terminations, and he said the company had lost no customers or employees from the poor press.
Though the liquidity from the secondary sale addresses one big concern of longterm workers, Hindawi said the funding round began more than a month before the recent articles and continued afterward without any change in the participants or terms.