Vista Equity Partners Management, LLC proposed to acquire remaining stake in KnowBe4, Inc. (NasdaqGS:KNBE) ) from a group of shareholders for $3.3 billion on September 16, 2022. KnowBe4 received a non-binding proposal from Vista Equity Partners to acquire all outstanding shares of KnowBe4 for $24 per share in cash. Vista Equity Partners Management, LLC entered into a definitive agreement to acquire KnowBe4, Inc. (NasdaqGS:KNBE) from a group of shareholders on October 11, 2022. Under the terms of the merger agreement, KnowBe4 stockholders will receive $24.90 per share in cash upon completion of the proposed transaction. Pursuant to equity commitment letters each dated October 11, 2022, investment funds affiliated with Vista committed to provide, at or prior to the closing of the Merger, with an aggregate equity contribution of up to approximately $2.18 billion and KKR Knowledge Investors L.P. committed to provide, at or prior to the closing of the Merger, with an aggregate equity contribution of up to approximately $300 million. Pursuant to a debt commitment letter dated October 11, 2022, the lenders party to that letter committed to provide Vista, at or prior to the closing of the Merger, with a debt financing of approximately $1 billion. Upon completion of the transaction, KnowBe4's shares will no longer trade on the Nasdaq Global Select Market, and KnowBe4 will become a private company. Upon termination of the Merger Agreement under specified circumstances, subject to certain exceptions, KnowBe4 will be required to pay Vista a termination fee of $138 million and Vista will be required to pay KnowBe4 a termination fee of $276 million.

The transaction is subject to customary closing conditions, including receipt of regulatory approvals and approval by KnowBe4 stockholders. Consummation of the Merger is also subject to the satisfaction or waiver of customary closing conditions including the expiration or termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. In response to an inquiry from Vista, The Board of Directors of KnowBe4 formed a special committee of the Board, comprised solely of independent directors to engage with Vista and take other actions that it deems appropriate. The Special Committee and KnowBe4's Board of Directors each unanimously determined that the transaction with Vista is in the best interests of KnowBe4 and its stockholders and the shareholders to vote in favor of the transaction. Vista board also approved the agreement. The applicable waiting period under the HSR Act expired on November 25, 2022. On December 8, 2022, KnowBe4 entered into a support agreement with Kevin Mitnick Family Trust, pursuant to which Mitnick agreed to vote all of the shares of KnowBe4's Class A common stock and Class B common stock beneficially owned by Mitnick (constituting 9.2% of the outstanding voting power as of December 5, 2022) (the “Mitnick Shares”) in favor of the Merger, subject to certain terms and conditions contained in the Support Agreement. The transaction is expected to close in the first half of 2023. KnowBe4 expects the Merger to close in 2023.

Morgan Stanley & Co. LLC is serving as financial advisor and fairness opinion provider to the Special Committee of the Board of Directors of KnowBe4, Megan J. Baier, Catherine V. Riley, Todd Cleary and Douglas K. Schnell Tzipori of Wilson Sonsini Goodrich & Rosati, Professional Corporation serving as KnowBe4's legal advisors and Mark A. Morton and Alyssa K. Ronan of Potter Anderson & Corroon serving as legal advisors to the Special Committee of the Board of Directors of KnowBe4. KnowBe4 will pay Morgan Stanley an aggregate fee of approximately $51 million, approximately $10 million of which was earned following delivery of the opinion. Ari Levi, Robert Goedert, Daniel E. Wolf, David M. Klein and Chelsea Darnell of Kirkland & Ellis LLP serving as legal counsels and Guggenheim Securities, LLC is serving as financial advisor for Vista. Gibson, Dunn & Crutcher LLP is serving as legal counsel to KKR, Latham & Watkins LLP is serving as legal counsel to Elephant Partners. Wim De Vlieger and Saee Muzumdar of Gibson, Dunn & Crutcher LLP acted as legal advisor to KKR Knowledge Investors L.P. Bradley Faris and Hans Brigham of Latham & Watkins LLP acted as legal advisor to Elephant Partners. Adam Stella and Jake Lloyd of Moulton | Moore | Stella LLP acted as legal advisor to Sjouwerman Enterprises Limited Partnership. Computershare Trust Company, National Association is acting as transfer agent for KnowBe4. Innisfree M&A Inc. is proxy solicitor for KnowBe4 for a fee of $60,000.

Vista Equity Partners Management, LLC completed the acquisition of remaining stake in KnowBe4, Inc. (NasdaqGS:KNBE) ) from a group of shareholders on February 1, 2022