KKR Buys Barracuda Networks For $4B

April 13, 2022

KKR signed a definitive agreement under which KKR’s investment funds will purchase Barracuda Networks, a leading provider of cloud-first security solutions, from Thoma Bravo, a leading software investment firm.

Founded in 2003, Barracuda offers a broad suite of cybersecurity solutions across email protection, application security, network security and data protection that can be deployed and managed in both cloud and hybrid environments. The Company focuses on serving small and medium sized enterprises (SMEs) and has more than 200,000 customers worldwide across a variety of industries, including education, government, financial services, health care, retail, consumer goods and manufacturing.

During Thoma Bravo’s ownership, Barracuda expanded and enhanced its product suite, implemented best-in-class operational processes and successfully executed a number of strategic acquisitions, which together propelled the Company to profitable and accelerating growth at over $500mm of revenue and enabled more customers to comprehensively protect their employees, applications, networks and data. KKR will provide resources and expertise to further accelerate the Company’s growth and support its strategic expansion in key areas, including managed detection and response, extended detection and response, and secure access service edge technology.

Barracuda will implement KKR's broad-based employee ownership program, which makes all employees owners in their respective businesses alongside KKR. This strategy is based on the belief that employee engagement is a key driver in building stronger companies. Since 2011, KKR has awarded billions of dollars of total equity value to over 45,000 non-management employees across more than 25 companies.

"We believe that with the support of KKR, we will continue to invest in growth and foster a culture that gives our team the resources and inspiration to continue to create and deliver the next generation of leading cybersecurity solutions for our customers and partners," said Hatem Naguib, CEO of Barracuda. "We are very appreciative of Thoma Bravo’s support and very excited to be working with KKR on this next phase of Barracuda’s journey."

"We continue to see cybersecurity as a highly attractive sector and are excited to back a clear leader in the space," said John Park, Head of Americas Technology Private Equity at KKR. "Given its proven track record of growth and innovation, we believe that Barracuda has the right team and model to capture business in this growing market."

"Barracuda has built an impressive portfolio of solutions that are helping SMEs around the world protect their data and address critical security challenges," said Bradley Brown, Managing Director at KKR. "We see a tremendous opportunity for long-term growth as these businesses continue to invest more in cybersecurity and we look forward to helping Barracuda scale and deliver next generation products that meet this growing need."

"Over the course of Thoma Bravo’s four-year partnership, Barracuda has solidified its position as an industry leader in cloud-first cybersecurity software," said Seth Boro, a Managing Partner at Thoma Bravo. "From multiple acquisitions to backend improvements, Barracuda has delivered tremendous value to its customers and partners."

"We are proud to have supported Barracuda to innovate and grow its security solutions portfolio, expand its customer base and achieve considerable operational improvements and revenue growth," said Chip Virnig, a Partner at Thoma Bravo. "We look forward to watching Barracuda’s continued success."

The investment in Barracuda builds upon KKR’s experience investing in the cybersecurity sector globally, with investments including Ping, Cylance, DarkTrace, ForgeRock, NetSPI and Optiv, among others.

The transaction is anticipated to close by the end of the year, subject to customary conditions.

J.P. Morgan is serving as exclusive financial advisor to Thoma Bravo and Barracuda. Kirkland & Ellis LLP is serving as legal counsel to Thoma Bravo and Barracuda. Simpson Thacher & Bartlett LLP is serving as legal counsel to KKR. Guggenheim Securities, DBO Partners and Barclays are serving as financial advisors to KKR.