Thoma Bravo agrees to acquire digital forensics firm Magnet Forensics for over $1B • TechCrunch

Thoma Bravo, the private equity and growth capital firm, today announced that it would spend $1.8 billion CAD (~$1.34 billion) to acquire Magnet Forensics, a Waterloo-based company making software used by defense forces and businesses to investigate cybersecurity threats.

Magnet Forensics will be purchased by a newly created corporation controlled by Thoma Bravo, Morpheus Purchaser Inc., which will pay Magnet Forensics shareholders a 15% premium over Thursday’s closing price on the Toronto Stock Exchange. Post-buy, Morpheus will be merged with mobile device forensics outfit Grayshift, which Thoma Bravo acquired majority control of last July.

The transaction is expected to close by Q2 2023, subject to shareholder and other customary approvals.

“We look forward to bringing together the complementary capabilities of Magnet and Grayshift to create a leader in the digital forensics and cyber security space,” Thoma Bravo partner Hudson Smith said in a press release. “Digital evidence is an increasingly critical aspect of investigations and the combined company will be well-positioned to further market expansion, accelerate innovation and provide even greater solutions to its customers.”

Launched in 2010, Magnet Forensics develops digital investigation software that acquires, analyzes, reports on and manages evidence from computers, mobile devices, Internet of Things devices and cloud services. The company was founded by Jad Saliba, a Waterloo regional police constable who worked in the police force’s high-tech crimes unit. After incubating Magnet Forensics’ software at the unit, Saliba decided to strike out on his own and sell the tech for a licensing fee, partnering with Jim Balsillie and Adam Belsher, then BlackBerry executives.

Before going public, Magnet Forensics attracted an investment from In-Q-Tel, the nonprofit venture arm of the U.S. intelligence community. The company claims that its software is used by more than 4,000 public and private sector customers — e.g. police forces, intelligence agencies, tax officials, border guards and militaries — in over 100 countries, helping investigators protect assets and guard national security.

Business was booming…