Clearwater cybersecurity company KnowBe4 is going private in a deal worth approximately $4.6 billion.
The all-cash bid came last month from Austin, Texas, private equity firm Vista Equity Partners, which offered $24 per share, a 44% markup over KnowBe4′s stock price at the time. The final deal will pay shareholders $24.90 per share. Vista already owned 13.5% of the company’s voting shares.
For a startup founded in 2010 that went public only last year, the deal — one of the largest ever for a Tampa Bay company — is transformational.
“Today’s announcement is a testament to the success of our strategy and the strength of our incredible team,” founder and CEO Stu Sjouwerman said in a statement. “Under Vista’s ownership, we will have access to additional resources and support, which will help us achieve our goals and deliver enhanced value to our customers. We look forward to partnering with Vista’s team to continue empowering businesses worldwide to strengthen their human firewall and make smarter security decisions every day.”
KnowBe4′s board of directors unanimously approved the proposal, which is expected to close in the first half of 2023.
“As a significant investor in KnowBe4, we could not be more excited to take this next step in our journey together,” Vista managing director Rod Aliabadi said in a statement. “We have long appreciated the work that KnowBe4 does in strengthening the human layer of cybersecurity through educating employees on how to identify social engineering and related cyber threats.”
KnowBe4 provides cybersecurity training for companies who want employees to be able to recognize phishing, ransomware and other scam attempts. The company said it’s used by 52,000 organizations worldwide.
“Sadly, cybersecurity is the gift that keeps on giving — there’s never going to be a cap on the investment in what people will pay to protect their data and protect their company,” said Ken Evans, managing director of the Tampa Bay Innovation Center in St. Petersburg. “To have a company like KnowBe4 organically grow here, create a product which attracts not only really great customer revenues, but attracts outside investment ... it’s a great testament for a product-based company to be able to pull that kind of capital into our market.”
Clearwater Mayor Frank Hibbard said he expected Vista would pump resources into KnowBe4 as it seeks to build on its investment, looking toward an eventual sale or return to the Nasdaq. That’s a good thing, he said, “as long as they don’t move their operation.”
“During COVID, they had a lot of their folks working from home, and now they’ve returned to the office, and it’s made a significant difference for the building downtown,” Hibbard said. “They really rely on the companies that we do have down here for at least lunch crowds. And we’re also hoping that some of the younger personnel will move here. It creates vibrancy.”
Follow trends affecting the local economy
Subscribe to our free Business by the Bay newsletter
You’re all signed up!
Want more of our free, weekly newsletters in your inbox? Let’s get started.Explore all your options
Deals of this magnitude are rare in Tampa Bay.
In 2020, Tampa’s WellCare Health Plans closed a $17.3 billion sale to St. Louis’ Centene Corp., which sits at No. 26 on the Fortune 500.
Later that year, Largo technology distribution company Tech Data sold to a private equity company for $6 billion — only to turn around the next year and merge with a public company in a deal worth $8.3 billion. The combined company, TD Synnex, is now Tampa Bay’s largest public company.
Other local public companies that have gone private in recent multibillion-dollar deals include New Port Richey commercial kitchen equipment supplier Welbilt ($3.5 billion) and Tampa’s Sykes Enterpsrise ($2.2 billion).
In 2019, Tampa’s ConnectWise went private in a deal reportedly worth more than $1 billion. That sale turned at least 70 employees into instant millionaires — and thus potential venture investors or startup entrepreneurs in their own right.
That “virtuous cycle of wealth and talent being regenerated,” Evans said, “is key to the growth and long-term health of a regional technology ecosystem.”
“I’ve worked in tech ecosystems all over the country, and the ones that have that rinse-and-repeat mentality are the ones that really are leaders — the Austins, the Seattles, the Silicon Valleys,” he said. “And we’re getting there. It’s been a journey, but we’re getting there.”