What happened

Shares of Proofpoint (NASDAQ:PFPT) surged 31% on Monday after the cybersecurity and compliance company announced that it reached a deal to be acquired by private equity firm Thoma Bravo. 

So what

The all-cash deal values Proofpoint at roughly $12.3 billion. Proofpoint shareholders will receive $176 in cash for each share they own, a 34% premium to the stock's closing price on Friday.

"Today's announcement is a testament to the strength of Proofpoint's people-centric approach to cybersecurity and compliance and underscores our important role preventing, defending, and responding to today's threats," Proofpoint CEO Gary Steele said in a press release.

Two people are shaking hands.

Proofpoint struck a deal to be taken private at a substantial premium to its recent market price. Image source: Getty Images.

The agreement gives Proofpoint's board of directors the option to solicit competing bids during a 45-day "go-shop" period that ends on June 9. Still, the transaction is expected to close in the third quarter, subject to shareholder and regulatory approval.

"We determined this premium, all-cash offer and partnership would create immediate and certain value for shareholders and help us achieve our operational and market ambitions more quickly for the benefit of our customers," Proofpoint director Dana Evan said.

Now what 

With more people working from home and businesses shifting their operations to the cloud, demand for cybersecurity solutions has boomed during the coronavirus pandemic. Thoma Bravo has been ramping up its investments in the rapidly expanding industry, and it sees an intriguing opportunity ahead for Proofpoint. 

"As the sophistication of cyberattacks continues to increase, Proofpoint is delivering the most effective solutions to help organizations protect their data and people across digital platforms," Thoma Bravo partner Chip Virnig said. "We look forward to partnering with the talented Proofpoint team and leveraging Thoma Bravo's significant security and operational expertise to help accelerate the company's growth."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.