TPG to buy Forcepoint's public sector unit for $2.45B

Global investment firm TPG has agreed to acquire the public sector business of Forcepoint for $2.45 billion, more than two years after the computer security software provider itself got a new private equity owner.

TPG said Monday it will invest in the business through its private equity platform focused on later-stage companies after the transaction closes, which all parties involved expect to happen in the fourth quarter of 2023.

The business TPG is acquiring has the brand name of Forcepoint Global Governments and Critical Infrastructure, or G2CI. Its customers also include commercial businesses that sell directly to U.S. government agencies, in addition to G2CI's own business relationships with federal and critical infrastructure customers.

Forcepoint concentrates on data protection, cloud access security broker, firewall and cross-domain solutions. Private equity firm Francisco Partners acquired Forcepoint from RTX (formerly Raytheon Technologies) in 2021 for approximately $1.1 billion in gross proceeds to the seller.

As a standalone business, G2CI will look to further its cross-domain and other information protection solutions across the federal and critical infrastructure landscapes.

In 2018, Forcepoint brought its government and infrastructure businesses together as the business saw a shared need for assured communications between common security environments.

Francisco Partners has left that structure intact since it acquired Forcepoint and subsequently promoted Sean Berg to his current role as president of G2CI.

“Today’s operating environment – one in which data volumes are compounding, attack surfaces are broadening, and threats are growing in sophistication – demands dynamic security solutions,” TGP Partner Tim Millikin said in a release. “This is especially true for the public sector, and Forcepoint has designed its platform to address the unique complexities of government objectives and culture. We’re excited to partner with Sean and the G2CI team to expand the platform and further its position as a leader in high assurance, zero trust security.”

“It’s our mission to support the national security and intelligence communities by providing trusted, data-driven security solutions that enable them to collaborate and conduct mission-critical work securely and effectively,” Berg said.

RTX acquired 80% of the ownership of Forcepoint in 2015 when the latter was known as Websense. The Forcepoint branding took effect one year later. Vista Equity Partners, which purchased Websense in 2013 for $906 million, sold the 20% stake it held Forcepoint to RTX in the fall of 2019.

TPG has some history of activity in the cybersecurity software market, having been an early investor in Zscaler and Tanium. Zscaler undertook an initial public offering in 2018.

TPG also acquired a majority stake in Intel's computer security unit McAfee in 2017, then created the identity management firm Delinea in 2021 by merging Thycotic and Centrify.

Forcepoint will fully focus on clients in certain commercial sectors and remain under the ownership of Francisco Partners.

Citi and Barclays worked as financial advisers to Forcepoint and Francisco Partners, which also looked to Paul Hastings LLP as legal adviser. Piper Sandler was financial adviser to TPG, which also counted Davis Polk & Wardwell LLP as legal counsel.