Mimecast is the latest email security provider to go private in a $5.8 billion all-cash acquisition by private equity firm Permira.

Under the terms of the agreement, Permira will acquire all outstanding ordinary shares of Mimecast for $80 per share. The Mimecast-Permira transaction should close in the first half of 2022, subject to customary closing conditions.

Upon completion, Mimecast will become a privately held company and shares of Mimecast will no longer be listed on any public market.

Mimecast’s Peter Bauer

Peter Bauer is Mimecast‘s chairman and CEO.

“Permira has a strong track record of collaboratively supporting companies’ growth ambitions and strategic goals, and we look forward to working together to further strengthen the cybersecurity and resilience of organizations around the world,” he said. “This is a great outcome for our company and our shareholders.”

Mimecast wouldn’t comment on what going private will mean for its partners.

Hot on the Heels of Proofpoint

Omdia’s Rik Turner

Rik Turner is principal analyst at Omdia, which shares a parent company with Channel Futures (Informa).

“Coming hot on the heels of Proofpoint being taken private for more than twice the amount paid for Mimecast earlier this year, this is the second largely pureplay secure email gateway (SEG) vendor withdrawing from the public scrutiny of being traded on the stock market, ostensibly to be able to focus more intensely on product and market development,” he said. “It is also tacit acknowledgement of the fact that the market has changed, not only with enterprise email cloudifying thanks to Office 365, but also Microsoft entering the fray with its own email security technology.”

In August, private equity giant Thoma Bravo completed its $12.3 billion acquisition of Proofpoint.

The real question now is where do the private equity owners of these two companies, which are also No. 1 and No. 2 in the SEG market, take them from here, Turner said.

“There had been talk of a trade sale of Mimecast, with Proofpoint mooted as a possible buyer, but that hasn’t come to pass, which is probably no bad thing, as it wouldn’t solve any of their underlying problems,” he said. “There could be some limited asset stripping, though I haven’t seen any signs of Proofpoint wanting to spin off its zero trust architecture (ZTA) business (the former Meta Networks), and I’m not sure how much truly non-email business Mimecast actually has that could be shed, if the private equity firm so desires.”

Private Equity Firms Heavily Investing in Cybersecurity

451 Research’s Scott Crawford

Scott Crawford is research director of information security at S&P Global Market Intelligence. He said private equity firms are continuing to invest significantly in cybersecurity companies.

“Normally conservative given the nature of their investors, they have struck some of the largest deals in the sector in the past year, not least thanks to the buoyance of security plays in both good times and bad, and the endurance of revenue from well-established customer relationships,” he said. “Email security remains a primary focus of security investment, demanding continued innovation to counter evolving threat tactics. For Mimecast, going private eliminates the need to cater not only to the public shareholder market, but to meet a range of compliance requirements that the market requires, enabling them to further focus on a landscape that remains competitive as adversary tactics seek to stay ahead of defenses in one of the adversary’s most favored opportunities to leverage human interaction and gain a foothold in targets.”

Permira’s Pierre Pozzo

Pierre Pozzo is principal of Permira. He said Mimecast is widely recognized as an “established leader and innovator in the email security space with a strong and growing position in the enterprise market.”

“We share the company’s belief in the significant opportunity ahead in cybersecurity across all collaboration channels, especially as more individuals have transitioned to a remote workplace,” he said. “We look forward to partnering with the Mimecast team to accelerate the product roadmap and expand the go-to-market organization in order to drive further growth.”