Thoma Bravo pays $6.3 billion for Varonis at $49.75, just 4.8% over the last close

Varonis▲+3.17% — Varonis, up 3.17 percent today, the Miami company whose software maps where sensitive corporate files sit and who can reach them ¹, got its exit after the close on October 15. Holders will receive $49.75 a share in cash, about $6.3 billion↗, from Proofpoint, the email-security firm that private equity shop Thoma Bravo took private for about $12.3 billion in 2021 ²¹.

The Varonis board approved the deal unanimously ³ and filed the agreement the same day on a Form 8-K, a regulatory report of material corporate events↗ ⁴. Shares closed at $47.34 and traded at $48.65 after hours, still under the offer ⁵.

The premium was paid in June, not at signing

The headline premium is 52%, measured against the June 22 close of $32.71 ⁶², the day before the first report that Varonis was exploring a sale ¹. June's sale reports lifted the stock roughly 30%, and September's report of Proofpoint talks↗ added more than 10% ⁷. Most of the premium was earned between the June leak and the September talks, before any agreement existed.

TD Cowen, the broker, had raised its target to $56 two days before signing ⁸, and the stock's 52-week high is $63.80 ⁸. At $49.75, the offer cleared the October 15 close by 4.8% ².

53 times cash flow for a business that loses money

Proofpoint is paying about 53 times trailing free cash flow and 8.4 times trailing revenue↗ ². The June quarter brought $180.02 million of revenue, up 18.3% and ahead of consensus, and SaaS annual recurring revenue, the subscription income a software company can count on renewing, of $598.1 million excluding conversions, up 25% ⁸.

The same quarter lost $46.8 million ⁹ while converting 22.7% of revenue into operating cash flow ¹⁰. Thoma Bravo has committed equity financing and secured debt commitments, and the Ontario Teachers' Pension Plan is investing in Proofpoint; closing is expected in the first half of 2027, pending shareholder and regulatory approvals ²³.

Growth is the case, churn is the question

The bull case is on the record: 18% revenue growth, 25% SaaS ARR growth, and Proofpoint chief executive Sumit Dhawan calling data security "the defining priority"↗ for organizations trying to realize AI's potential ³⁸.

The record also carries a Reddit▲+6.26% — Reddit, up 6.26 percent today thread from a small security team shopping Varonis alternatives over alert fatigue, posts rather than churn data ¹¹. Bronstein, Gewirtz & Grossman, a shareholder-rights law firm, is investigating purchases made before February 4, 2025↗ ¹². Third-quarter results are still scheduled for October 27, ahead of the shareholder vote ⁸.

The rule the pricing supports is plain: take the cash unless the shares trade meaningfully above $49.75 before the vote, which is what a competing bid would look like ²⁵. Thoma Bravo just told the market what the data-security layer costs: 53 times trailing free cash flow ².