Proofpoint Inc. (PFPT) stock is rising but why?

Proofpoint, Inc. (NASDAQ: PFPT) a leading cybersecurity company aimed to protect workers and data from advanced cybersecurity criminals, confirmed that it has entered into an agreement for its acquisition by Thomas Bravo, a private equity firm specializing in the software and technology services segment. Under the terms of the agreement, Proofpoint will be valued at approximately $12.3B.  PFPT stock soared adjacent to the news.


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Proofpoint Inc. (PFPT) shares were rising 31.20% to trade at $172.89 in the current market at the last check. The stock of PFPT completed the previous trading session at $131.78. . Shares of the company were fluctuating between $130.99 and $132.45.In the past 12 months, the company’s stock has advanced 10.96%, and in the last week, the stock has moved down to -3.43%.

About the acquisition

In accordance to the acquisition conditions, PFPT shareholders will receive $176.00 per share. The cash-only payment will depict a premium of approximately 34 percent over Proofpoint’s closing share price on April 23, 2021, the last day of full trading before the acquisition announcement. As the transaction is closed, Proofpoint will become a private company and continue to provide cybersecurity solutions to organizations globally.

Proofpoint will benefit from the enhanced operating capabilities, additional capital support and deep sector expertise of Thoma Bravo. Board of directors and executives of Proofpoint have unanimously approved the agreement with Thoma Bravo and recommend shareholders of the company to vote in favor of the transaction. A Special Meeting of Shareholders to be called in connection with the transaction, where shareholders will vote in regards to the acquisition.

The transaction is predicted to be completed in 3Q 2021, subject to customary closing conditions such as approval by PFPT shareholders and approval by the relevant regulatory authority. After the transaction is closed, Proofpoint’s common stock will not be listed on any public market.

The definitive agreement also includes a 45-day time period expiring on June 9, 2021, which authorizes the Board and its advisors to consider several alternative acquisition proposals from third parties. This will give the board the right to end the merger agreement to enter into a more lucrative proposal. However, there is no assurance that the extended time line will result in a superior proposal. Furthermore, Proofpoint does not intend to disclose developments unless it determines such disclosure is appropriate and an absolute necessity to provide adequate information.

Conclusion

Acquisition by Thomas Bravo will provide benefit to PFPT’s operating capabilities and provide them with capital and strategic support. Furthermore, deep sector expertise from the private equity firm will provide ease in PFPT expansion which has peaked investor interest with Proofpoint shares rising immensely at last check.

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