Thoma Bravo sells Imperva for $3.6bn in hot cybersecurity market; RF makes legal play with Nextpoint investment

Good morning Hubsters, Craig McGlashan here with the Tuesday Wire.

We’ve got three deals for you today in sectors that have been in high demand all year.

Cybersecurity is first up, with Thoma Bravo agreeing to sell Imperva to Thales for $3.6 billion.

Next we switch to legal tech, as RF Investment Partners announces a growth investment in Nextpoint.

We then finish on the booming pet sector, where Apollo Global Management has agreed to invest in PetSmart, a pet retailer majority-owned by BC Partners and its co-investors.

Deal secured
Thoma Bravo has agreed to sell Imperva, a San Mateo, California-based data and application cybersecurity firm, to French multinational company Thales for $3.6 billion.

The price gives a 6.1x 2024 enterprise value/revenue multiple, which is in line with similar deals and trading multiples of cybersecurity businesses with similar financials, according to a release. It also gives an implied 17x 2024 EBIT multiple and a 13x 2027 EBIT multiple (both post run-rate synergies).

The big multiples are no surprise, given the amount of demand for cybersecurity businesses. The sector has been one of the hottest on PE Hub this year – for more on that read Rafael Canton’s interview with Bain Capital partner Dewey Awad and principal Zach Berger from late June.

“We liked the cybersecurity space because threats are always changing and evolving,” Awad told Rafael. “There’s always work to be done, especially for software vendors.”
Thoma Bravo completed its buyout of Imperva in January 2019 and its sale is expected to close by the start of next year.

The buyer, Thales, provides systems ranging from sensors to comms to infrastructure to the aerospace, defense, transportation and security sectors.

The Paris-headquartered company is also no stranger to buying assets from private equity firms. Last week, PE Hub Europe’s Irien Joseph reported that Thales had entered exclusive negotiations to acquire Cobham Aerospace Communications (AeroComms) from Advent International-backed Cobham Group for an enterprise value of $1.1 billion.

Legally speaking
RF Investment Partners has made a growth investment in Chicago-based Nextpoint, a legal tech company.

“We are fully committed to providing Nextpoint the resources needed to evolve and better serve law firms and organizations nationwide,” said RF co-founder and managing partner Peter Fidler in a statement.

The legal sector has been one area heavily touted to benefit from the boom in generative AI technologies such as ChatGPT. Bloomberg wrote the provocative headline ‘Paralegals Race to Stay Relevant as AI Threatens Their Future’ just last month, for instance.

And private equity seems to be betting big on legal. On top of RF’s investment in Nextpoint, earlier this month Renovus Capital Partners acquired California-based legal tech company Keesal Propulsion Labs, while over on PE Hub Europe, we’ve been following Inflexion Private Equity Partners’ take-private pursuit of UK legal and business service provider DWF Group.

Pet play
Apollo Global Management has agreed to make an investment in PetSmart, an omnichannel pet retailer in North America.

BC Partners, alongside co-investors including GIC and the PetSmart management team, will remain the majority shareholder of PetSmart and retain control of the board.

BC Partners first invested in PetSmart in 2015, leading a group of investors to acquire the company in a public-to-private transaction.

“We are excited to be making this investment in PetSmart, an industry leader providing a wide breadth of products and services to pets and pet parents in communities across North America,” said Apollo partner Salim Hirji in a statement.

The boom in pet businesses seems to be a worldwide phenomenon. The biggest take-private attempt in Europe so far this year is in the sector, for instance, EQT agreed terms with the board of Dechra Pharmaceuticals, a Norwich, England-based veterinary pharmaceuticals business, in early June.

I’ll need to finish there as my own cats are demanding food. Chris Witkowsky will be in the chair tomorrow.

Cheers,

Craig