Audax purchasing Toronto-based BlueCat from Madison Dearborn.
BlueCat Networks is set to be acquired once more, this time by Audax Private Equity.
The deal, which is expected to close during the third quarter of 2022, will see Madison Dearborn Partners sell Toronto-based network security vendor Bluecat to another American private equity (PE) firm in Audax.
While the financial terms of the transaction were not disclosed, The Globe and Mail reported that the acquisition values BlueCat at over $700 million.
The Globe reported the deal values BlueCat at over $700 million.
The deal comes just over five years after BlueCat co-founders and owners Michael and Richard Hyatt sold BlueCat for $400 million to another United States (US) PE firm in Madison Dearborn Partners. The Hyatt brothers maintained a minority stake as part of the 2017 acquisition.
Michael and Richard Hyatt are now selling the balance to Audax, which will acquire a controlling stake in BlueCat as part of the deal.
“I am thrilled to announce that we have sold BlueCat,” wrote Michael Hyatt in a LinkedIn post. “I will be (finally!) stepping back and focusing on investing in great entrepreneurs.”
Founded in 2001 by the Hyatt brothers, BlueCat is a computer and network security firm that provides infrastructure software for network control, automation, and security, catering to large global enterprises, including 30 percent of the Fortune 100.
According to The Globe, BlueCat has over $100 million in annual revenue, more than 400 employees, is profitable, and has expanded its sales by 20 percent per year since 2017.
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“This investment represents a significant milestone for our company, customers, employees, and all of our stakeholders, as we commence the next phase of our growth journey,” said BlueCat CEO Stephen Devito, who took on the role in fall 2020.
Audax, which is based in Boston, New York, and San Francisco, helps platform companies execute add-on acquisitions to fuel revenue growth and optimize operations.
Audax managing director Iveshu Bhatia said BlueCat “possesses a high quality and innovative business model that is primed for both organic and inorganic growth,” identifying BlueCat as a vehicle to acquire other companies in the computer and network security space.
Devito described Audax as a good fit for BlueCat given the firm’s “lengthy and reputable track record of successfully partnering and working collaboratively with software and technology companies in infrastructure and security.”
Feature image from Bluecat.
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