USA private equity firm scoops up Sophos for nearly $4 billion

A leading USA private equity investment firm, Thoma Bravo, LLC , focused on the software and technology-enabled services sectors, has reached agreement with its board of directors to buy Abingdon-based Sophos Group plc, which means ownership of another successful UK company is heading Stateside.

Oxford University graduates Jan Hruska and Peter Lammer founded Sophos in 1985 originally as a hardware computer company before they realised there were bigger opportunities for a business which could protect computer systems from the growing threat of internet viruses.

Sophos employs 3,500 people across the world, 600 of which are in the UK. Sophos protects more than 400,000 organizations of all sizes in more than 150 countries from cyberthreats.

“Today marks an exciting milestone in the ongoing journey of Sophos,” said Kris Hagerman, CEO at 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.”

The proposed offer price implies an enterprise value of $3,948 million.

Thoma Bravo currently manages a series of private equity funds representing more than $35 billion of capital commitments and, in the software industry, is one of the most active private equity firms, having completed more than 200 acquisitions representing over $50 billion in aggregate enterprise value.

Thoma Bravo said that the acquisition of Sophos would further demonstrate its focus on the large and growing cybersecurity market.

Sophos is listed on the London Stock Exchange and has grown substantially through organic development and strategic acquisitions.

It is a leading global provider of cloud-enabled end user and network security with more than 400,000 customers across 150 countries, more than 47,000 channel partners and 100 million users.

Thoma Bravo believes that Sophos' significant investments in technology, products, and expertise can enable the company to successfully evolve into a next-generation security leader with a significant opportunity to enhance its services offering.

Seth Boro, a Managing Partner at Thoma Bravo said: "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."

It is intended that the acquisition will be implemented through Bidco, a newly incorporated company, formed on behalf of funds managed and/or advised by Thoma Bravo, by way of a court sanctioned scheme of arrangement under Part 26 of the United Kingdom's Companies Act 2006. The acquisition is conditional on the approval of the scheme of arrangement by Sophos shareholders and customary regulatory approvals and other conditions and is expected to be completed in the first quarter of 2020.