No Profits, No Problem: Imprivata Bought by Private Equity for $544M

One of the stalwarts of Boston’s technology scene is going private again. Lexington, MA-based Imprivata, a developer of health IT security software, is getting bought by a private equity firm two years after going public.

Imprivata has agreed to be acquired by Thoma Bravo for about $544 million. The price per share ($19.25) represents a 33 percent premium over Imprivata’s closing stock price of $14.50 on Tuesday. As of midday Wednesday, Imprivata’s stock (NYSE: IMPR) was trading at about $19 per share.

CEO Omar Hussain said in a statement that “this transaction represents a great outcome for our current shareholders.”

The company’s annual revenues totaled $119.1 million in 2015 and $97 million in 2014. Like a lot of publicly traded tech firms, Imprivata hasn’t been profitable; it reported net losses of $23.1 million and $16.7 million in those respective years.

Imprivata is among the few Boston-based tech companies to go public in the last two years. Others include (which just got a major investment from Google Capital), Wayfair, HubSpot, Rapid7, and Acacia Communications. Of these, only Acacia has been sustainably profitable in recent years.

Imprivata got its start in 2002, working on password management and user authentication systems. The company came to focus on the healthcare sector, and its single sign-on software helps doctors access computer systems and electronic health records in a secure way.

Imprivata raised about $66 million in its IPO in June 2014 (pricing at $15 a share). The company’s stock price has been rising slowly but fairly steadily since a sharp drop in October of last year. In May 2015, Imprivata acquired Florida-based biometrics firm HT Systems for $19.1 million.

Prior to its IPO, Imprivata was backed by venture investors including General Catalyst, Highland Capital Partners, Polaris Partners, and SAP Ventures. As of March 30, its top institutional stakeholders included Wellington Management, Tamarack Advisers, and RGM Capital.

San Francisco-based Thoma Bravo currently backs companies including Compuware, Dynatrace, Riverbed Technology, and SolarWinds.

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