Thoma Bravo to buy Sophos in £3.1bn deal

Thoma Bravo, the acquisitive private equity firm that focuses on technology, has made a £3.1 billion offer for Oxford, UK-based security firm Sophos.

The £5.83 per share offer represents a 37.1 per cent premium on the London Stock Exchange-listed company's closing stock price on Friday. The proposed deal for the FTSE-250 company has been "unanimously recommended" by directors to shareholders.

It comes two-and-a-half years after Thoma Bravo purchased a minority stake in McAfee, one of the world's largest anti-virus software companies, which was divested by Intel in 2016. The private equity firm had been interested in acquiring McAfee outright, but those talks broke down.

Thoma Bravo has set-up a special purpose vehicle, called Surf Buyer Limited, to arrange the acquisition.

"Thoma Bravo believes that the acquisition of Sophos represents an attractive opportunity to increase its exposure to the large and growing cybersecurity market," the company wrote in its offer document.

It continues: "Sophos is a global leader in next-generation cybersecurity solutions spanning endpoint, next-generation firewall, cloud security, server security, managed threat response, and more. Sophos solutions are designed to be highly innovative and effective, and at the same time simple and intuitive for organizations of all sizes."

In the company's last financial year, Sophos posted revenues of $710.6 million (it reports in dollars, rather than pounds), with subscription revenues weighing in at $593.9 million. While the EMEA region remains its biggest market at $363.6 million, accounting for just over half of its revenues, with the Americas the next largest region for the company, at $253.3 million.

As a result, the company posted pre-tax profits of $53.6 million in its full-year 2019 to the end of March 2019.

The Sophos acquisition would not be the first for Thoma Bravo, which has some 230 different deals under its belt since it was founded in 2003.

In the security space, Thoma Bravo also acquired Tripwire in 2011, exiting in 2015; SonicWall in 2010, exiting in 2012 with its sale to Dell; and, LogRhythm in 2018, an investment it still holds. Other recent security acquisitions that the private equity firm has held-on to (for now) include Barracuda and Imperva.