Private equity firm Thoma Bravo is set to buy cybersecurity firm Proofpoint in an all-cash deal that will value the company at around $12.3 billion.

The firm, which is currently traded on the Nasdaq index, provides a wide variety of software-as-a service (SaaS) products for network security, email security, email archiving and other use cases.

The news comes after the Sunnyvale, California based company – which has a UK office in Reading – beat Wall Street estimates for first quarter revenues and earnings.

The acquisition, expected to close in the third quarter, will net Proofpoint shareholders $176 per share, a premium of about 34 per cent to the stock's closing share price on April 23.

The deal is set to be the largest recorded private equity buyout of a software firm, exceeding the $11 billion paid by Hellman & Friedman for human resources vendor Ultimate Software in February 2019.

Proofpoint’s valuation would also exceed that of cybersecurity rivals McAfee and Symantec, whose enterprise businesses were acquired for $4 billion and $10.7 billion respectively by Symphony Technology Group and Broadcom.

The transaction is set to finalise in the third quarter of 2021, if approved by Proofpoint’s shareholders and regulators.

In the UK, investment in the cybersecurity industry has remained high. Cyber security start-up funding increased by 52 per cent year-on-year - in contrast to the 10 per cent decrease across all UK tech sectors - according to research released by Plexal and Beauhurst in January.

"We believe that as a private company, we can be even more agile with greater flexibility to continue investing in innovation, building on our leadership position and staying ahead of threat actors," said Gary Steele chairman and chief executive of Proofpoint. "Thoma Bravo is an experienced software investor, providing capital and strategic support to technology organisations, and our partnership will accelerate Proofpoint's growth and scale at an even faster pace.”

He added: "This is an exciting new chapter for Proofpoint that would not have been possible without our employees' hard work and commitment to our customers, partners and each other."

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