The Israeli company, Tufin Software Technologies, specializing in security policy management, has come out to declare the intention by a US-based software company, Turn/River Capital, to acquire Tufin at an approximate value of $570 million. The acquisition is all cash.
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About Tufin Software Technologies
Tufin Software Technologies streamlines some of the most extensive and most complicated networks globally. Its security innovations are vital in facilitating companies to implement correct changes in a matter of hours rather than in days while boosting their security stance in addition to business mastery.
Tufin was founded about 20 years ago but went public by issuing an IPO in 2019. Concerning the impending acquisition, Turn/River capital signed a written agreement concerning the terms of payment and acquisition.
As stipulated in the terms of the acquisition agreement, Tuffin shareholders are set to get $13.00 for every share they own in cash. That represents a premium of roughly 44% over the closing share price of Tufin as of the close of day on the 5th of April 2022 and a premium of about 54% of the month’s weighted average closing price.
It is expected that Tufin will transform into a private company once the transaction is complete. The company will then join hands with Turn/River Capital to speed up aid to enterprise clientele utilizing policy-driven mechanization to tackle future security threats.
Tufin’s co-founder, who doubles up as the chairman and CEO, Ruvi Kitov, had the following to say, “Today’s announcement is a testament to Tufin’s leadership in security policy management for hybrid networks and cloud environments. Since our inception nearly 20 years ago, we have made significant strides in developing our policy-based automation solution and have become a market leader. This deal represents an important milestone for Tufin, and as a private company, we will have the opportunity to accelerate our growth through investments in our technology, people, and go-to-market. The team at Turn/River specializes in helping software companies like Tufin, and with their partnership and expertise I am confident that we will be able to achieve our long-term goals faster.”
About Turn/River Capital
Turn/River Capital is located in San Francisco, and its function is to develop software. It offers capital plus additional resources to struggling firms, marketing/customer service, plus hiring. As its name suggests, Turn/River capital provides capital and customer support to struggling firms in buyouts, spin-outs, and recapitalizations.
Turn/River capital originator, also the managing partner, had the following to say concerning the acquisition. “Tufin is an industry leader in network security policy management, helping enterprise customers secure their most critical network infrastructure and cloud assets. We are incredibly excited to bring our best-in-class operations team, with their deep expertise in marketing, sales, and customer success, to our partnership with Tufin. We look forward to working hand in hand with them to drive accelerated growth and scale.”
Transaction Details
The Board of Directors of Tufin software technologies unanimously agreed to the terms of the agreement with Turn/River Capital, and approved it in unison. They endorsed that Tufin stakeholders vote for the transaction to proceed during a special meeting for stakeholders that has been scheduled to discuss the acquisition.
The transaction agreement comprises a 30-day ‘go-shop’ period that is set to expire on the 5th of May, 2022. The ‘go-shop’ period allows the board and its advice-givers to actively initiate or solicit alternative third-party acquisition proposals. Moreover, the board has the right to end the merger covenant, should they receive a proposal superior to Turn’s, subject to the union agreement’s terms and conditions.
However, the ‘go-shop’ has no assurance to yield a proposal more superior to Turn/River Capital’s. Tufin does not intent on disclosing any information pertaining to the solicitation progress unless the revelation of such information is relevant or otherwise needed. Hence, the company can utilize a secure VPN that uses strong encryption to protect the results of the solicitation process to prevent interested solicitors or market traders from getting access and stealing the secret information. A secure VPN encrypts data and location, thus ensuring no one can hack to steal information, or that cyber attackers cannot install ransomware or malware to tamper with Tufin’s company data.
It is expected that the transaction will be complete within 2022’s next quarter, based on the expected conditions for closure, including Tufin’s shareholders’ approval and reception of regulatory endorsements. Once the two companies merge, Tufin’s common stock will be dropped from the public market. In other terms, Tufin’s becomes private and joins hands with Turn/River Capital. However, Tufin’s headquarters will remain in Tel Aviv, Israel.
Ruvi Kitov, (Tufin’s CEO, chairman, and co-founder) and Reuven Harrison (Tufin’s co-founder and CTO) have come into voting contracts and agree to use their common stock shares to vote for Turn’s acquisition of Tufin.
Conclusion
Regarding the anticipated transaction, Tufin should make a proxy statement and share it with Tufin’s shareholders and the SEC. The shareholders are encouraged to peruse through the proxy statement to help them understand the merger, and to make an informed decision when they vote for the acquisition agreement.