Vector Capital has agreed to take private Aladdin Knowledge Systems for roughly $160 million at $11.50 per share, a price significantly reduced from the offer Vector made for Aladdin in August.
Aladdin rejected Vector’s unsolicited offer of $13 per share in August on the basis that it “significantly undervalue[d] the company and its prospects for the future”.
Information security company Aladdin had also rejected an offer from Vector to purchase the company’s digital rights management business for between $125 million and $135 million.
The firm holds 14 percent of Aladdin’s outstanding stock.
The agreed $11.50 per share represents a premium of 64 percent over Aladdin’s share price on 5 January, the last day of trading before discussions with Vector were made public.
“After extensive negotiation and careful and thorough analysis, conducted with our independent advisors, the board has unanimously endorsed this transaction as in the best interests of the company and our shareholder,” Aladdin chief executive Yanki Margalit said in a statement.
Wells Fargo Foothill has agreed to provide debt financing for the transaction, which does not have a financing condition for closing. The transaction is expected to close within two to three months.
Technology-focused private equity firm Vector spun out of Ziff Brothers Investments, a family investment firm, in 1997. In August 2007, Vector closed its fourth fund on $1.2 billion, more than three times the size of its previous fund.
The firm most recently acquired Symantec’s application performance management business alongside Greylock Partners.