Private equity investment firm Thoma Bravo has announced that it will acquire a majority interest in SIEM provider LogRhythm. Financial terms of the deal, which is expected to close in Q3 2018, were not disclosed.
LogRhythm, founded in 2003 and based in Boulder, Colorado, has more than 2,500 global customers and its NextGen SIEM Platform has maintained its position as a leader in Gartner’s SIEM Magic Quadrant for six years back-to-back. Total known investment in the company to date sits at around $126.3 million, with the most recent investment round, led by Riverwood Capital in 2016, earning them $50 million.
According to Reuters, the company had been planning a $1 billion-plus IPO in 2015, but had postponed plans due to the “austere” IPO market.
“LogRhythm believes it has found an ideal partner in Thoma Bravo,” said Andy Grolnick, LogRhythm’s chairman, president and CEO. “As we seek to take LogRhythm to the next level and extend our position as the market’s preeminent NextGen SIEM vendor, we feel Thoma Bravo’s cybersecurity domain expertise and track record of helping companies drive growth and innovation will make this a powerful and productive relationship. We believe this is an exciting strategic step forward for our company.”
Thoma Bravo’s cybersecurity domain expertise and track record of helping companies drive growth and innovation will make this a powerful and productive relationship.
– Andy Grolnick, Chairman, president and CEO, LogRhythm
Bill Smith, LogRhythm’s SVP of worldwide field operations, said that the proceeds from the deal will be used to continue building tools that enable channel partners to cost-effectively deliver managed services. Growth in hiring is likely to be a priority as well, including developers, sales and marketing personnel, and support staff for customers and partners.
He added that the company hopes to further differentiate itself from competitors through investments in its core SIEM platform as well as related technologies such as behavioural analytics, saying that “our customers and partners want a robust and complete solution”.
“Since 2003, LogRhythm has proven its innovation and leadership in the application of automation, analytics and artificial intelligence to solve customers’ advanced threat detection and threat lifecycle management challenges, and achieve security operations workflow efficiency,” said Chris Petersen, CTO, chief product officer and co-founder of LogRhythm. “We look forward to working closely with Thoma Bravo to continue our customer-centric approach to innovation, enabling enterprises across the globe to protect themselves from damaging cyberthreats.”
According to Grolnick, going private allows LogRhythm to avoid a substantial amount of cost and complexity – but staying independent rather than being absorbed by a larger cybersecurity company, as has happened to several more specialised security providers, lets LogRhythm maintain its brand at the same time.
Thoma Bravo is an understandable choice of partner – the company has an established interest in tech, particularly cybersecurity, with past investments including Blue Coat Systems, Bomgar, SonicWall, SailPoint, Barracuda Networks and SolarWinds, among others.
“Thoma Bravo has long admired the work of Andy, Chris, Phil Villella and the entire LogRhythm team,” said Seth Boro, a managing partner at Thoma Bravo. “The company’s impressive track record of growth shows the continued demand for LogRhythm’s differentiated offerings. With Thoma Bravo’s investment, we look to further accelerate product innovation and drive continued customer success.”