Entrust finds its suitor in Thoma Bravo

The long search for a buyer might be over for Entrust, a maker of encryption and public key infrastructure software.

The company today announced that private equity firm of Thoma Bravo LLC will pay $114 million to take the company private.

“We have been looking at strategic alternatives for 18 months,” said Bill Conner, Entrust’s president and chief executive officer.

During that time, company officials have talked to other software makers, hardware companies and systems integrators as well as private equity firms.

“We’re a $100 million a year software maker and in this market, you need scale,” he said.

To get that scale, a company is either acquired by a larger company, bought and broken up, going to a variety of other larger companies, or is acquired as a platform to make more acquisitions, Conner said.

With the Thoma Bravo acquisition, Entrust stays intact with its management team in place. The strategy going forward will be to grow the business and make related acquisitions, he said.

Conner could not comment on what those other acquisitions could be. “We haven’t entered into those discussions, but I’m sure they have some ideas,” he said.

Thoma Bravo already owns 12 software companies such as Attachmate Corp., Datatel Inc., and JDA Software Group Inc. The Entrust acquisition will be the first in the security space, Conner said.

In the cash deal, Thoma Bravo will pay $1.85 a share, a 22.4 percent premium over Entrust’s average closing price of $1.51 for the 30 trading days that ended April 9.

However, Thoma Bravo may not be the final buyer. The structure of the acquisition agreement gives Entrust a 30-day window to consider other offers.

In the government market, Entrust’s customers include the State and Treasury departments, the FBI and CIA. It also works with integrators such as EDS and Northrop Grumman. It has worked on the e-Passport and HSPD-12 projects.