Merger Monday has been sweet to ArcSight shareholders, who learned that HP has agreed to pay $43.5 per share in cash for a company that had spent most of 2010 hovering at around $25 per share. But the big winner in this $1.5 billion bonanza is Kleiner Perkins, the venture capital firm that first invested in ArcSight more than eight years ago.
Kleiner was one of several VC shops to invest a total of around $30 million into ArcSight, a Cupertino, Calif.-based maker of security and compliance software. It appears to have put in at least $10 million out of its tenth fund, including as lead of a $9.5 million Series B round in April 2002. Other investors prior to ArcSight’s 2008 IPO included SVIC, Integral Capital Partners, Institutional Venture Partners, New Enterprise Associates, In-Q-Tel and Samsung Ventures.
After ArcSight began trading on the Nasdaq, Kleiner held 5.88 million shares, or a 19% stake. It disposed of over 400,000 shares in June 2009, and another 1.77 million shares one year later. Those two sales earned Kleiner around $49 million (based on market prices at the time), and left it with around a 10.1% ownership stake.
The HP deal vales Kleiner’s remaining ArcSight shares at nearly $152 million. All together, that means more than $200 million cash-out on around $10 million cash-in. That’s what the venture world calls a home run (or at least a bases-clearing triple), even if it did take the better part of a decade to achieve…
