Barracuda Networks Employees Become Co-Owners of the Company

Barracuda Networks, a major supplier of cloud-first cybersecurity solutions, will be acquired by KKR’s investment funds from Thoma Bravo, a renowned software investment firm. The financial details were kept under wraps. Barracuda will execute KKR’s broad-based employee ownership model, which will make all workers owners of their respective businesses in addition to KKR.

Founded in 2003, Barracuda Networks provides a comprehensive range of cybersecurity solutions that can be installed and managed in both cloud and hybrid settings. Their offerings include email protection, network security, application security, and data protection. The company is focused on serving small and medium-sized enterprises (SMEs). It has over 200,000 clients globally in areas such as education, financial services, health care, government, retail, manufacturing, and consumer products.

Photo Hatem Naguib, CEO at Barracuda Networks
“We believe that with the support of KKR, we will foster a culture that gives our team the resources and inspiration to continue to create and deliver the next generation of leading cybersecurity solutions,” said Hatem Naguib, CEO at Barracuda Networks.

Barracuda will implement KKR’s broad-based employee ownership model, which will make all employees, in addition to KKR, owners of their own businesses. Employee engagement is a crucial driver in establishing stronger firms, according to this strategy. Since 2011, KKR has rewarded over 45,000 non-management workers billions of dollars in total stock value across more than 25 firms.

The investment in Barracuda Networks adds to KKR’s worldwide cybersecurity experience, which includes investments in Ping, Cylance, DarkTrace, ForgeRock, NetSPI, and Optiv, among others.

“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, Chief Executive Officer (CEO) at 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.”

Subject to customary conditions, the acquisition is expected to conclude before the end of this year.

Cybersecurity Sector

Barracuda expanded and enhanced its product suite, implemented best-in-class operational processes, and completed a number of strategic acquisitions during Thoma Bravo’s ownership, propelling the company to profitable and accelerating revenue growth of over $500 million.

“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.”

KKR will contribute resources and experience to help the company accelerate its growth and expand strategically in areas like as managed detection and response, extended detection and response, and secure access service edge technologies.

KKR is a multinational investment corporation that specializes in alternative asset management, capital markets, and insurance. By using a rigorous and disciplined investing strategy, hiring world-class people, and supporting growth in its portfolio businesses and communities, KKR aspires to achieve attractive investment returns.

“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.”

Thoma Bravo

J.P. Morgan is Thoma Bravo and Barracuda’s sole financial advisor. Thoma Bravo and Barracuda have retained Kirkland & Ellis LLP as their legal counsel. KKR has retained Simpson Thacher & Bartlett LLP as its legal counsel. KKR’s financial advisors include Guggenheim Securities, DBO Partners, and Barclays.

“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.”

With more than $103 billion in assets under management, Thoma Bravo is one of the world’s largest private equity firms. Over the last two decades, the business has purchased or invested in over 375 firms with a total worth of over $190 billion. Chicago, Miami, and San Francisco are among the firm’s locations.

“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.”