Barracuda Networks, a cloud computing and data security company, goes private through purchase by private equity firm Thoma Bravo in a $1.6B all-cash deal
Lauren Gensler / Forbes :
Context & Ripple Effects
This 2017 take-private is an early move in what became Thoma Bravo's signature playbook of pulling cybersecurity vendors off public markets — a run that later included the $3.9B Sophos acquisition and the far larger $12.3B Proofpoint buyout. Barracuda, a cloud security and data protection vendor, fit the profile exactly: recurring-revenue software trading below what a private owner could extract.
The deal also proved to be a trade rather than a permanent home. Five years on, Thoma Bravo exited via KKR's ~$3.8B purchase of Barracuda including debt — more than double the entry price — making this $1.6B all-cash buyout the opening leg of one of the clearest PE value-creation cycles in security software.
First-order effects
- Barracuda shareholders are cashed out at $1.6B and the company leaves the public markets, freeing it from quarterly reporting while Thoma Bravo takes control of its capital structure.
- Thoma Bravo adds a second networking-and-security asset alongside its earlier Riverbed Technology acquisition, deepening a portfolio built on infrastructure software bought out of public markets.
Second-order effects
- Publicly traded security and infrastructure software vendors become visible acquisition targets, since Barracuda demonstrates that PE will pay cash premiums for exactly this revenue profile — pressure that precedes Thoma Bravo's later Majesco and Bottomline deals.
- Rival buyout shops see the resale upside: the gap between Barracuda's $1.6B entry price and KKR's later ~$3.8B exit establishes security software as an asset class worth competing over.
Third-order effects
- If the pattern holds, cybersecurity consolidates into PE-owned portfolios rather than public conglomerates, with firms like Thoma Bravo acting as serial owners who restructure, stack acquisitions, and resell — shifting where security innovation and pricing power are governed.
- The public-to-private-to-public-or-strategic cycle becomes a structural feature of the sector, meaning listed security vendors must justify their multiples against a standing private bid rather than only against peers.
The trend: Private equity is becoming the default ownership layer for mid-market cybersecurity software, buying public vendors private, compounding them through follow-on deals, and recycling them to new buyers at higher valuations.