Websense, a content-security provider, has agreed to be purchased by private equity firm Vista Equity Partners in a cash-for-stock deal worth approximately $907 million, the companies said in an announcement on May 20.
The planned sale continues a trend among many technology companies—including Blue Coat Systems, BMC Software, and SonicWall—to return to private management. Vista will pay $24.75 for each share of Websense stock held by investors, a price that is 29 percent more than the stock's closing price as of Friday, May 17, and 53 percent more than the average closing price over the past two months, Websense stated in its announcement.
"Vista shares a similar vision for the company, including a dedication to developing and delivering best-in-class cyber-security to our customers," Websense CEO John McCormack said in the announcement. "Vista brings an operational discipline that will enable us to continue to invest in the business and technology innovation."
Websense is not the first security firm to be taken private by an investor. In 2010, network security firm SonicWall was taken private by investment firm Thoma Bravo for $717 million and, according to The Wall Street Journal, sold two years later for $1.2 billion to computer-technology company Dell.
In early 2012, Thoma Bravo bought up Blue Coat Systems in a $1.3 billion stock purchase. And earlier this month, two investment firms took information-technology management firm BMC Software private in a deal worth $6.9 billion.
Even prominent computer-technology company Dell is attempting to go private in a controversial move that would quadruple founder Michael Dell's holdings of the company and leave it in greater debt.
Websense started in 1994 as a security reseller, NetPartners, changing its name to Websense in 1999, following the success of its software that helps companies manage employee Web use. In 2000, the company went public at $18 a share, generating $65.7 million in its initial public offering, and announced a 2-for-1 stock split in 2006.
While the company started off focusing on Web content, it transformed itself into a content-security firm throughout the past decade. In 2010, the company launched its Triton data-security platform, which accounts for an increasing portion of its revenues. In the first quarter of this year, the company announced profits of $2.8 million, compared with a loss in the same quarter a year earlier, and two-thirds of the revenue came from Triton sales and subscriptions.
Vista Equity Partners launched in 2000, the same year that Websense went public. Founded by two alumni of Goldman Sachs, Vista focuses on a small number of investments each year, looking to make specific operational improvements that can turn a company into a high cash-flow business.
"We are long-term investors in enterprise software and data companies that are committed to being leaders in their markets," Robert F. Smith, CEO and founder of Vista Equity Partners, said in the announcement.
The deal to take Websense private is not expected to change the senior management structure at the firm, the companies said.