In the largest-ever private equity investment in cloud software, Thoma Bravo has agreed to acquire Proofpoint for $12.3 billion to boost its cybersecurity profile.

The announcement of the deal on Monday came four days after Thoma Bravo closed its previous top cloud acquisition — the $10.2 billion purchase of RealPage, which serves the real estate industry.

Proofpoint is known for email-based security tools but has also increasingly moved into other applications and services managed in the cloud. Thoma Bravo will pay $176 per share for the company, representing a premium of 34% to Friday’s closing price but only $2 per share more than the stock’s 52-week high.

“We’re excited to partner with this talented team at a moment when organizations need innovative solutions to navigate an increasingly treacherous cybersecurity environment,” Seth Boro, a managing partner at Thoma Bravo, said in a news release.

As CNBC reports, the private equity giant “has been building up a portfolio of cloud software vendors, focusing primarily on companies that have seen slowing growth rates and are selling at discounts to their peers.”

Thoma Bravo’s cybersecurity profile already includes Sophos, DigiCert, Imperva, Barracuda Networks, and several others. Analysts project that the security-as-a-service market will be worth some $26 billion by 2025, growing at an average rate of 19% in the years between now and then.

Founded in 2002, Proofpoint went public nine years ago and just passed $1 billion in annual revenue by providing software to stop malware and help businesses protect employees from phishing and other scams across mobile and cloud.

The company competes with Symantec, Mimecast, Trend Micro, and Barracuda.

“We believe this is a great exit for a company that has significantly decelerated over the past two years,” analysts at Mizuho Securities wrote in a client note. Proofpoint’s revenue growth slowed to 18% in 2020 from 24% in 2019 and 39% the year before that.

The terms of the deal provide a 45-day window for Proofpoint to shop for another buyer.

“Today’s announcement is a testament to the strength of Proofpoint’s people-centric approach to cybersecurity and compliance and underscores our important role preventing, defending, and responding to today’s threats,” CEO Gary Steele said.

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