• Chesapeake Group

Thoma Bravo to take Sophos private


Overview:

On 14 Oct 2019, Thoma Bravo offered to acquire Sophos for $7.40 per share in cash, a 37% premium on closing price on 11 Oct 2019. This represents an enterprise value of $3.9bn.


Major shareholders including the private equity group Apax Partners and the co-founders (Peter Lammer and Jan Hruska), who collectively own more than a quarter of the company, have accepted the deal. The board of directors of Sophos have stated their intention to unanimously recommend the offer to the company’s shareholders.


About Thoma Bravo:

Thoma Bravo is a leading private equity firm focussed on the software and technology enabled services sector with more than $35bn in investor commitments.


It is one of the most active and experienced private equity firms investing in software and technology companies, particularly in cybersecurity. It has acquired more than 200 software and technology companies representing more than $50bn of value.


About Sophos Group:

Founded in 1985, Sophos is a global leader in cloud-enabled next-generation cybersecurity. The company has been driving transition to next-generation cybersecurity by leveraging advanced capabilities in cloud, machine learning, APIs, automation and managed threat response to deliver enterprise-grade protection to any size organisation.


It sells its products and services exclusively through a global channel force of more than 47,000 partners and managed services providers and protect more than 400,000 organisations in more than 150 countries.


The company is headquartered in Oxford, UK and is publicly traded on the London Stock Exchange,


Transaction details:

The acquisition will see Apax Partners and the co-founders selling their stake in the company. The private equity player had acquired a 70% stake for $580m in 2010 which had valued the company at $830m. Apax Partners has diluted its stake over the decade and currently owns 10.6% in Sophos.


The deal is valued at an EV / LTM sales multiple of 5.5x and an EV / LTM EBITDA multiple of 49.2x.


Thoma Bravo's expertise with cybersecurity software companies, strong operational framework, and deep experience guiding companies through successful business model and technology transitions is expected to enable it to accelerate Sophos' growth, enhance profitability, and further improve performance.


Th acquisition will be implemented through Bidco, a newly incorporated company, formed on behalf of funds managed by Thoma Bravo, by way of a court sanctioned scheme of arrangement.

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