Boulder-based LogRhythm said Thursday that it sold off a majority stake to Thoma Bravo, a private equity firm with offices in San Francisco and Chicago.
LogRhythm, which helps clients automatically monitor their computer systems for security threats, said the deal is expected to close by September. Financial terms were not disclosed.
“We were looking for a partner that would have deep expertise in security and software, and Thoma Bravo’s only focus is software, and they have security as well,” saidCEO and co-founder Andy Grolnick. “We’ve known the folks at Thoma for years, and they’ve been tracking us. At a personal level, we’ve come to know them, and the values that are important to us seem important to them. They’re known for investing in market leaders and doing it well.”
Grolnick said the company will continue to operate their business as usual and continue its growth trajectory, with Thoma at its side to help with acquisitions and other advice. Grolnicksaid that going public is always possible.
“This is the best path for us (right now). That doesn’t mean an IPO isn’t a possibility in the future,” he said.
Founded in 2003, LogRhythm gained a reputation in the industry for its threat-detection technology, out companies such as IBM to win “Best of” security management technology by the SANS Institute, asecurity training organization. It is also considered a Inc.
The company has also raised about $122 million from investors. During the last round, in August 2016, LogRhythm employed 600 people andraised $50 million, led by Riverwood Capital Management.
It’s a big deal for Colorado and local investors such as Access Venture Capital, one of LogRhythm’s earliest investors, saidFrank Mendicino, a managing director at the Westminster venture capital firm.
“When Access originally invested 11 years ago, we did so to support the founders’ vision of building the most important cybersecurity software company in the world right here in Colorado,”Mendicino said in an email. “We could not be more proud of the management team’s progress toward the realization of this vision, but there is work yet to be done. The transaction announced today is an important step on the journey.”
Thoma, known for investing in software companies, was tied for third last year for having 13 acquisitions within the software industry, according to PitchBook, which tracks investment deals. The top acquirer was Vista Equity Partners, which bought Denver cybersecurity company Ping Identity in 2016.
“We’ve had great partners to help us get from the early days when it was just three of us in Boulder to over 650 employees today,” said Grolnick, adding that Thoma is buying out most existing investors but the three founders are retaining a “meaningful stake.”
