BY Richard Summerfield
Software-focused private equity firm Thoma Bravo is to acquire UK cyber security firm Sophos for $3.8bn.
Thoma Bravo’s takeover offer of $7.40 pence per share represents a 37 percent premium over Sophos’s closing price on Friday, the last day of trading before the deal was announced.
The board of directors of Sophos have stated their intention to unanimously recommend the offer to the company’s shareholders and the deal is expected to complete during the first quarter of 2020, pending customary closing conditions and regulatory approvals.
Thoma Bravo raised billions for its latest private equity fund this year, and has increasingly focused on the cyber security space. In 2018, the firm bought Imperva and Veracode. Though the firm has acquired more than 200 software and technology companies during its 40-year history, including holding stakes in other cyber security firms such as Tripwire, Blue Coat, Sonicwall, Digicert and Entrust, Sophos will be its first acquisition outside the US.
"We are excited by the opportunity to partner with the Sophos management team and employees as we further develop Sophos as a best-in-class software franchise and nextgen security leader,” said Seth Boro, a managing partner at Thoma Bravo. “The acquisition fits with our strategy of investing in and growing software and technology businesses globally. The global cybersecurity market is evolving rapidly, driven by significant technological innovation, as cyber threats to business increase in scope and complexity. Sophos has a market-leading product portfolio and we believe that, by applying Thoma Bravo’s expertise, operational framework and experience, we can support the business and accelerate its evolution and growth.”
“Today marks an exciting milestone in the ongoing journey of Sophos,” said Kris Hagerman, chief executive of Sophos. “Sophos is actively driving the transition in next-generation cybersecurity solutions, leveraging advanced capabilities in cloud, machine learning, APIs, automation, managed threat response, and more. We continue to execute a highly-effective and differentiated strategy, and we see this offer as a compelling validation of Sophos, its position in the industry and its progress.”
“It is the view of the Sophos Board that this is a compelling offer for Sophos shareholders which secures the delivery of future value for shareholders today,” said Peter Gyenes, chairman of Sophos. “Thoma Bravo has deep sector expertise in cybersecurity software as well as a long and successful track record of partnering with and investing in its portfolio companies to support long-term growth and success. Under Thoma Bravo’s ownership we expect Sophos to accelerate its evolution and leadership in next-generation cybersecurity. The Sophos board believes that this recommended offer delivers a significant opportunity for all stakeholders – our shareholders, customers, partners, and employees.”