Proofpoint Agrees To Buy Varonis For $49.75 A Share In A $6.3 Billion Cash Deal
Thoma Bravo-backed Proofpoint would take Varonis private, with a $423.3 million fee owed to Varonis if the buyer fails to close.
Varonis agreed to be bought by Proofpoint, a Thoma Bravo portfolio company, for $49.75 per share in cash, a deal valued at about $6.3 billion, according to an 8-K filed Thursday. If it closes, Varonis shares will be delisted from Nasdaq and the company will be private.
What the price represents
The companies said in a joint release that $49.75 is a 52% premium to Varonis' $32.71 close on June 22, 2026, the last full trading day before initial sale rumors. It is 17% above the $42.35 close on September 1, 2026, the last full trading day before further media reports of a possible sale.
The deal values Varonis at about 53x trailing free cash flow and 8.4x trailing revenue, the release said. Varonis shares closed Thursday at $47.34, according to market data.
The board approved the deal unanimously. CEO Yaki Faitelson called it "an excellent outcome for the company and our shareholders." He said it followed a review led by independent directors that included outreach to potential strategic and financial buyers.
Faitelson owns about 0.67% of the shares and signed an agreement to vote them in favor. He also signed a term sheet to serve as a non-executive officer for 18 months after closing.
Fees, financing and timing
Varonis must pay Proofpoint a $211,700,000 termination fee in specified cases, such as the board changing its recommendation or the company terminating to accept a superior proposal. Proofpoint owes Varonis a reverse fee of $423,300,000 if, among other triggers, it fails to complete the deal once conditions are met.
There is no financing condition. Thoma Bravo funds have committed equity, lenders have committed debt, and the release says Ontario Teachers' Pension Plan agreed to invest in Proofpoint.
Closing is expected in the first half of 2027. It needs approval from holders of a majority of voting power, expiration of the Hart-Scott-Rodino antitrust waiting period and specified foreign clearances. Either side can walk if the deal is not done by July 15, 2027, subject to a three-month extension for regulatory approvals.
For holders, options are cashed out for the spread over the exercise price. Some restricted stock units vest at closing, while others convert into cash awards on their original schedules. The filing also says the merger triggers a make-whole fundamental change under Varonis' 1.00% convertible notes due 2029.
What to watch
Varonis will report third-quarter results after the market close on November 3 and will hold no earnings call. It also intends to file a proxy statement for a special shareholder meeting.
Until closing, the release says Proofpoint and Varonis will keep operating as separate, independent companies.
