Thoma Bravo, a private equity and growth capital firm, announced on Tuesday that it will acquire digital forensics firm Magnet Forensics for $1.8 billion CAD, approximately $1.34 billion. The acquisition will be made through a newly created corporation controlled by Thoma Bravo, Morpheus Purchaser Inc., which will pay Magnet Forensics shareholders a 15% premium over Thursday’s closing price on the Toronto Stock Exchange.
Magnet Forensics, founded in 2010, specializes in digital investigation software that acquires, analyzes, reports on, and manages evidence from computers, mobile devices, Internet of Things devices, and cloud services. The company claims its software is used by more than 4,000 public and private sector customers in over 100 countries, including police forces, intelligence agencies, tax officials, border guards, and militaries.
The acquisition will see Morpheus merged with mobile device forensics outfit Grayshift, which Thoma Bravo acquired majority control of last July. The merger of the two companies will create a leader in the digital forensics and cybersecurity space, according to Thoma Bravo partner Hudson Smith. He added that the combined company will be well-positioned to further market expansion, accelerate innovation, and provide even greater solutions to its customers.
The digital forensics market is expected to grow from $5.8 billion in 2022 to $10.9 billion in 2028, according to a recent Imarc report. Grayshift’s CEO, Adam Belsher, said that the combination of Grayshift’s mobile access and extraction capabilities and Magnet’s digital investigation suite will position the merged firms strongly and allow customers to better extract, process, examine, collaborate on, and manage digital forensic evidence.
The transaction is expected to close by Q2 2023, subject to shareholder and other customary approvals. This acquisition is the latest in a series of high-profile software venture purchases for Thoma Bravo, which now has an estimated $114 billion in assets under management.