Thoma Bravo Strikes $1.3B Deal for Magnet Forensics

Thoma Bravo has agreed to acquire digital investigation software developer Magnet Forensics through Morpheus Purchaser, a newly established corporation controlled by the private equity firm, for approximately $1.3 billion.

Thoma Bravo said Friday it expects the acquisition to close in the second quarter of 2023, pending approvals by shareholders and regulators and other customary closing conditions.

Upon the deal’s closing, Magnet will be combined with mobile device digital forensics provider Grayshift, which became a portfolio company of Thoma Bravo in July 2022, to form a new private entity focused on providing end-to-end digital investigations platforms to public safety agencies.

“We look forward to bringing together the complementary capabilities of Magnet and Grayshift to create a leader in the digital forensics and cyber security space,” said Hudson Smith, a partner at Thoma Bravo. 

“Digital evidence is an increasingly critical aspect of investigations and the combined company will be well-positioned to further market expansion, accelerate innovation, and provide even greater solutions to its customers,” added Smith.

Magnet was founded by Adam Belsher and Jad Saliba in 2010 and develops digital investigation platforms that acquire and analyze evidence from mobile devices, computers, cloud, internet of things-based devices and other digital sources to help public and private sector clients safeguard assets and national security and counter crimes.

Belsher and Saliba and Grayshift Founders David Miles and Braden Thomas will assume leadership roles in the combined company. Magnet Chair Jim Balsillie will serve on the new entity’s board.

Magnet’s board unanimously approved the proposed deal. The company’s shareholders will hold a special meeting in March to consider the transaction.

Under the transaction’s terms, holders of outstanding subordinate voting shares will get approximately $33 cash per share and the rolling shareholders will receive $29 for each outstanding SV share and multiple voting share.

Blake, Cassels & Graydon is serving as Magnet’s legal adviser in the transaction. Kirkland & Ellis is acting as Thoma Bravo’s legal counsel, while McMillan is serving as the private equity firm’s Canadian legal adviser.

A special committee appointed by Magnet’s board tapped Morgan Stanley and CIBC Capital Markets to serve as its financial adviser and independent valuator, respectively, in the deal.