Thoma Bravo, a private equity and growth capital firm, today invested C$1.8 billion (approximately $1.34 billion) in Waterloo, which makes software used by defense forces and businesses to research cybersecurity threats. announced the acquisition of Magnet Forensics, a company based in
Magneto Forensic will be acquired by Thomas Bravo-controlled Morpheus Parcher, Inc., and Magneto Forensics shareholders will be paid a 15% premium to Thursday’s closing price on the Toronto Stock Exchange. After the acquisition, Morpheus will be merged with his Grayshift, a mobile device forensics company that Thoma Bravo took majority control of last July.
The transaction is expected to close by the second quarter of 2023, subject to customary shareholder and other approvals.
Hudson Smith, partner at Thoma Bravo, said in a press release: Digital evidence is an increasingly important aspect of investigations, and the combined firm will be well-positioned to further expand its markets, accelerate innovation, and provide even better solutions to its customers. . ”
Founded in 2010, Magnet Forensics develops digital investigative software that captures, analyzes, reports and manages evidence from computers, mobile devices, Internet of Things devices and cloud services. The company was founded by Waterloo District Police Constable Judd Saliba, who worked in the police’s high-tech crime unit. After cultivating his Magnet Forensics software at the unit, Saliba decided to single-handedly sell the technology for licensing fees, partnering Jim Balsillie and Adam Belsher, who were BlackBerry executives at the time.
Prior to going public, Magnet Forensics received investment from In-Q-Tel, the non-profit venture arm of the US intelligence agency. The company’s software is used by more than 4,000 public and private sector customers in more than 100 countries, including law enforcement, intelligence agencies, tax authorities, border agents and the military, to help investigators protect assets, It helps protect national security.
Business was booming before the acquisition (yes, Thoma Bravo submitted its first offer in early October last year). In its third quarter 2022 earnings call, Magnet Forensics reported annual recurring revenue growth of 50% year over year to $80.9 million and EBITDA (earnings before interest, taxes, depreciation and amortization) up 25%. totaled $5.9 million.
Magnet is benefiting from the growing digital forensics market, which is expected to grow from $5.8 billion in 2022 to $10.9 billion in 2028, according to a recent Imarc report.
Grayshift CEO Adam Belsher said the combination of Grayshift’s mobile access and extraction capabilities with Magnet’s digital investigative suite will position the combined company in a strong position to help customers better extract evidence for digital forensics. , can be processed, investigated, cooperated and managed.
“We believe the combination of Magnet and Grayshift will bring tremendous value to our customers by further integrating and expanding our product suite. Workflow will come to fruition and ultimately contribute to our common mission: the pursuit of justice,” Belcher said in a statement. “We look forward to partnering with Thoma Bravo and Grayshift to build out their digital research suites to further innovate and continue to serve an increasing number of organizations and use cases.”
Magnet Forensics is the latest in a series of high-profile software venture acquisitions for Thoma Bravo, which currently manages more than an estimated $114 billion in assets. In 2022, the company spent billions to acquire cybersecurity startups Ping Identity, Sailpoint, ForgeRock, Bottomline Technologies, and Coupa Software.
