KKR has agreed to acquire a majority stake in Optiv Security from Blackstone, which will sell off most of its 2014 investment but retain a minority stake in the business. The deal reportedly values the company at $1.8 billion and is expected to close next quarter.
Optiv is a Denver-based provider of end-to-end cybersecurity services working with clients in 76 countries, including more than 70% of the Fortune 100. The company was formed in 2015 via the merger of Accuvant and FishNet Security.
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For KKR, the acquisition continues an ongoing push into the cybersecurity sphere. Within the past two years, the firm has also made investments in Darktrace, an enterprise threat defender; Ping Identity, a supplier of identity security solutions; and Cylance, an endpoint protection provider.
To support such deals, KKR is raising its first-ever tech vehicle: the Next Generation Technology Growth Fund, which had compiled about $688 million in capital commitments as of a few weeks ago. The acquisition of Optiv, however, will be financed by the firm’s 11th Americas PE fund, which closed in 2013 on $8.7 billion.
For Blackstone, the sale marks the culmination of a months-long process that also included filing in November for a public offering. A depressed IPO market was surely one factor that turned the firm toward pursuing a buyer instead. Investcorp and Sverica will also sell their respective stakes in Optiv as part of the deal.
Blackstone could reap more than 6x its money in the exit, according to The Wall Street Journal.
Article by Kevin Dowd, PitchBook