Davis Polk, Willkie Guide TPG Merger of Cloud Security Vendors

Davis Polk & Wardwell is advising private equity firm TPG Capital on its agreement to buy cybersecurity vendor Thycotic Software Ltd. for $1.4 billion and combine it with recently acquired rival Centrify Corp.

Willkie Farr & Gallagher said it is representing Thycotic and its seller, private equity firm Insight Partners, according to a statement.

Davis Polk also advised TPG Capital on its January purchase of Centrify. Kirkland & Ellis advised the seller in that transaction, private equity firm Thoma Bravo.

Thycotic and Centrify specialize in a cloud-based identity security known as privileged access management. Forrester estimates that 80% of cybersecurity breaches involve privileged credentials, according to the statement.

“TPG has long believed that this sector is poised for rapid growth and we believe this new company will drive the adoption of this essential software,” said Tim Millikin, partner at TPG Capital.

Centrify’s CEO, Art Gilliland, will serve as CEO of the combined business, while Thycotic’s CEO, James Legg, will be its president.

Explosive growth of cloud services and interconnection of networks, combined with increasingly costly cyber breaches, is spurring organizations to seek protection, Gilliland said.

The new company “will deliver one of the most comprehensive product offerings in the business with the ability to adapt and scale to meet the evolving needs of customers,” he said.