Entrust, provider of enterprise authentication and digital signature solutions, announced Monday that it has agreed to be acquired for $114 million.
Private equity firm Thoma Bravo has agreed to buy out Entrust, but the Dallas-based company said it can consider other proposals for the next 30 days.
News of the deal comes as Entrust also announced Monday that its first-quarter sales were down 12 percent from last year's first-quarter total of $25.8 million.
But the NASDAQ-listed firm, which is trading more than 50 percent off its highs from last year, expects to post a first-quarter profit this year of $1.7 million, or 3 cents per share. The company posted losses of $1.2 million for the same period last year.
Bill Conner, president and CEO of Entrust, said the company was weighing its options amid a turbulent economy that was not friendly to a public company with revenue of less than $100 million a year.
"In a small company, those risks keep escalating in a bad market," he told SCMagazineUS.com on Monday. "If you miss one [quarter of Wall Street estimates] you get severely penalized for several quarters."
The acquisition, meanwhile, will enable Entrust to focus more on developing products related to to risk-based authentication, fraud detection, PKI and SSL certificates, the company said.
"We will work closely with Entrust's management team and employees to deliver increased value for customers and enhanced growth of the business," Seth Boro, principal of Thoma Bravo, said in a statement.
Thoma Bravo has acquired about 38 other software companies, which earn a combined $600 million annually. Entrust would be the first security-specific purchase.
"They'll be looking for other companies in the security space to acquire and combine with ours," Conner said. "We'd become the platform for them to grow and scale with in security."
Entrust employs fewer than 400 people. Some of those may get laid off as the company transitions from public to private, Conner said.
Entrust would not be the first security company to be absorbed by a private investment firm. Earlier this year, Aladdin Knowledge Systems was acquired by Vector Capital for $160 million. Its offerings will be integrated into SafeNet, which was picked up by Vector for $634 million two years earlier.