Behind the scenes: How Websense's proposed Austin investment would play out

Feb 11, 2014
Austin Business Journal

Websense Inc.'s proposed move to Northwest Austin may be a part of owner Vista Equity Group's efforts to cut costs and reinvigorate hiring after the Austin-based private equity group paid $1 billion last year to take the technology security company private


On Feb. 6, the company said it was considering relocating its headquarters from San Diego to Austin. Details in the proposed economic development agreement indicate Websense would hire about 470 workers by the end of 2016. The company has also proposed about $10 million in business investment by the end of 2015


Websense's submitted plans show that the company would locate at a 90,000-square-foot facility at 10900 B Stonelake Blvd., just north of West Braker Lane


Websense, founded in 1994, makes software to protect companies from cyberattacks and data theft. The company went public on the Nasdaq exchange in 2000 and its stock price hit an all-time high of about $34 per share in 2005. By 2012, the company's growth had fallen behind competitors and its stock was trading at around $17. At the time, analysts described Websense as struggling to differentiate its products and losing business to lower-cost competitors


In 2013, Vista Equity proposed a buyout of Websense for $24.75 a share, a deal that was completed by the end of June. By the end of the year, there were reports that Vista would relocate the company to Texas to cut costs and help in hiring new talent.Sure enough, by October, Websense was in talks with the city of Austin and consultants Cushman & Wakefield Inc. about an incentive deal to move its head office to the Texas capital. And on Feb. 6, the city and the governor's office unveiled the incentive package intended to lure the company to Austin


Websense has not officially decided to come to Austin. Austin City Council must first approve the proposed incentive package before the total $4.9 million in incentives offers becomes official


Print Article opens in new window