Following the April 6 closing of Thoma Bravo’s purchase of Magnet Forensics, the latter is set to delist from the Toronto Stock Exchange.
Thoma Bravo struck a deal in January to buy Kitchener-Waterloo-based Magnet for $1.8 billion CAD, take the publicly-traded company private, and combine it with digital forensics firm Grayshift.
The acquisition closing, and stock exchange delisting concludes what had been a raucous and fractious acquisition with independent director shareholders protesting the deal.
Founded in 2009 and led by a former police officer and ex-BlackBerry executives, Magnet develops digital investigation software that acquires, analyzes, and shares evidence from a variety of devices. The company claims it serves thousands of law enforcement, government, military, and corporate organizations globally.
Magne currently trades on the TSX as ‘MAGT.’ The company closed its initial public offering (IPO) on May 2021, raising just over $115 million CAD in gross proceeds, for net proceeds of about $108 million.
Nellore Capital Management, one of Magnet’s largest investors, opposed American private equity company Thoma Bravo’s acquisition of the Canadian cybersecurity firm. Nellor argued the deal undervalued Magnet.
Magnet defended the deal, maintaining the acquisition was properly priced following a competitive process, and was the best way forward for the company.
Magnet’s independent special committee, which consisted of Carol Leaman and Jerome Pickett and oversaw the negotiation process, claimed that Morgan Stanley “ran a robust and fair process.” That process involved reaching out to eight other potential buyers, and ultimately led to the company securing a higher purchase price than the amount that Thoma Bravo initially offered.
Shareholders ultimately approved the deal on March 23.
Thoma Bravo is merging Grayshift and Magnet to expand on each companies separate capabilities. Thoma Bravo acquired Grayshift in July 2022 after Magnet tried to buy Grayshift only to be outbid by Thoma Bravo, as The Globe and Mail reported. Before this merger, Magnet, viewed as a leading provider of search tools focused on computers and digital, frequently partnered with Grayshift for help with extracting data from mobile devices.
Feature image courtesy Magnet Forensics.