Vista Acquires KnowBe4, Inc. as Cybercrime Explodes

Vista Equity Partners announced its acquisition of KnowBe4, Inc., the “provider of the world’s largest security awareness training and simulated phishing platform.” The all-cash transaction is valued at $4.6 billion and is expected to close in the first half of 202.

KnowBe4 trains companies’ employees to combat hacking, “empowering businesses worldwide to strengthen their human firewall and make smarter security decisions every day,” according to the companies’ joint press release. The company’s services are used by 52,000 organizations globally. Vista is a global investment firm with $94 billion in assets under management that “exclusively invests in enterprise software, data and technology-enabled organizations across private equity, permanent capital, credit and public equity strategies.”

KnowBe4 focuses on working with companies to recognize phishing schemes – when hacker gangs send fraudulent messages that seek to induce users into revealing their passwords, credit card information, or other sensitive data. These fraudulent messages can go to great lengths to appear to be an email from a reputable bank, for example, and trick the user into thinking they are indeed their trusted bank requesting their log in or other information. The hacker can then use this information to steal from or extort their victim.

In ransomware attacks, once the hacker gains access to a company’s most vulnerable server, the ransomware syndicate sends notice of the hack back to the victim, with 77% of ransomware incidents involving the threat to leak exfiltrated data.

Such extortion has become a costly problem. Cybersecurity Ventures estimates that ransomware damages have ballooned from $325 million in 2015 to costing victims $20 billion in 2021. That number is projected to explode to $265 billion by 2031, with a new attack on a consumer of business every 2 seconds.

By the beginning 2021, the average ransomware payment reached $220,298, a 42% jump from the end of 2020.

According to Matterhorn’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, Vista was advised by law firm Kirkland & Ellis LLP and financial adviser Guggenheim Securities, LLC. KnowBe4 was advised by law firms Wilson Sonsini Goodrich & Rosati and Potter Anderson & Corroon, and financial advisor Morgan Stanley & Co. LLC.