In a deal valued at close to $1 billion, San Diego's Websense Inc. (Nasdaq: WBSN), a leader in warding off cyber attacks and data theft, has agreed to be sold to Vista Equity Partners, a private equity firm that invests in software, data and other tech businesses.
News of the impending sale pushed Websense's stock price nearly 28.7 percent higher before the market opened, from a closing price of $19.23 on Friday afternoon to an opening price of $24.74 when the markets officially opened on Monday. The sharp rise led to a halt in the stock's sales through much of the morning.
Under the terms of the agreement, Vista will pay Websense investors $24.75 in cash for each share of Websense common stock they hold, which was 29 percent over Friday's closing price and 53 percent above the average closing price over the past 60 days.
Websense Chairman John Carrington said the deal, which occurred "after detailed discussions with several potential acquirers," would provide stockholders "with immediate and substantial cash value that reflects our assessment of the fair value of the company."
John McCormack, Websense's CEO, said Vista shares the company's vision for bringing more cyber security to the marketplace but also "brings an operational discipline that will enable us to continue to invest in the business and technology innovation."
Robert F. Smith, Vista's chief executive and founder, described his firm as a long-term investor in software and data companies "that are committed to being leaders in their markets." He said he was impressed by Websense's portfolio of products, adding that "we look forward to working with the company to enable it to reach its full potential."
Upon closing, Websense will become a privately held company. Websense senior management is expected to continue with the company and its headquarters are expected to remain in San Diego.
The Websense board of directors has unanimously recommended that the company's stockholders vote in favor of the offer. Depending on the how the stockholders vote and how quickly it takes the deal to clear federal antitrust law, it should close within the next five months, Websense officials say.
As is common in such transactions, law firms are already investigating to see if there is any room for shareholders to sue over the deal. The Briscoe Law Firm, Powers & Taylor and Levi & Korsinsky have announced they intend to investigate whether the board of directors adequately shopped the company around before entering the transaction and whether Vista is paying enough for Websense’s stock.
The deal is the latest in a series of deals to take tech firms private, ranging from Dell computers in February to BMC Software, which announced a $7 billion buyout earlier this month.