Darktrace agrees $5.3bn takeover by Thoma Bravo
Thoma Bravo to add Cambridge-based company to security software portfolio 20 months after first opening talks
Darktrace has agreed a $5.32 billion (£4.25 billion) acquisition by private equity firm Thoma Bravo. The cash acquisition equates to around $7.75 (£6.20) per share, and a 44% premium on the company’s average stock price over the past three months. It listed on the London Stock Exchange at £2.50 per share in 2021.
The Cambridge-based company's software uses self-learning AI to neutralise and automate responses to cyber threats, via its Darktrace ActiveAI Security Platform. It claims around 9,400 customers worldwide.
Darktrace chair Gordon Hurst suggested that the offer represented "fair value" for shareholders at "an attractive premium", and added that the takeover would provide Darktrace with "access to a strong financial partner… who can enhance the company's position as a best-in-class cyber AI business headquartered in the UK".
It is not the first time that Thoma Bravo has approached Darktrace with an acquisition proposal. In August 2022, it was revealed that the software company was in preliminary talks with the private equity firm, but at a vastly lower offer price that valued Darktrace at just £2.67 billion ($3.2 billion). However, those talks collapsed a month later.
Nor is it the first time that Thoma Bravo has been shopping in London for security software. It also acquired venerable British anti-virus software maker Sophos for $3.9 billion in February 2020. Thoma Bravo's cybersecurity portfolio investments are currently estimated at around $45 billion in value, while its current assets under management are valued at $138 billion.
The loss of such a high-profile company as Darktrace from the LSE was described by Russ Shaw, founder of Tech London Advocates & Global Tech Advocates, as "disappointing news".
He called for a series of "pro-business reforms" to help maintain London as an attractive destination for the country's technology companies. These include the implementation of the Mansion House Compact, a series of reforms set out by chancellor Jeremy Hunt in July 2023, as well as the slashing of what he described as "needless bureaucracy".
For Thoma Bravo and other acquisitive US organisations, listed British companies represent bargain buys with values on the London Stock Exchange languishing well behind its US and some international peers. On top of that, the value of the pound against the dollar has fallen significantly over the past ten years, from just over $1.70 in April 2014 to $1.25.
Darktrace was founded in 2013 by Invoke Capital, an investment firm controlled by Autonomy founder Mike Lynch. He now owns just 3.9% of Darktrace – which means he stands to gain just over $200 million from the sale – while his wife owns a further 2.9%.
However, Lynch is currently embroiled in a fraud trial in San Francisco over allegations that he was the "driving force" behind a major fraud at Autonomy, the software company he co-founded, ran and sold to Hewlett-Packard for $11 billion (£8.6bn) in 2011.