US private equity group Thoma Bravo to buy Abingdon-based company in grees £3.1bn takeover

( via – – Mon, 14th Oct 2019) London, Uk – –

US private equity group Thoma Bravo to buy Abingdon-based company, which has 3,400 staff

The UK cybersecurity firm Sophos, which assisted the NHS and a number of businesses during a massive WannaCry ransomware attack two years ago, is to be bought by a US private equity group for $3.9bn (£3.1bn).

The FTSE 250 company, which is based in Abingdon near Oxford and employs 3,400 people, said it would unanimously recommend the offer from Thoma Bravo. It is the first acquisition outside the US for the Chicago-based buyout firm. Sophos shares jumped 37% to 585p, in line with the bid terms of $7.40p a share (583p).

Sophos floated at 225p in June 2015, valuing the firm at just over £1bn, in one of the biggest technology IPOs in the UK that year. It was its third attempt at going public.Advertisement

The company was founded in 1985 by Jan Hruska and Peter Lammer, who stepped down as joint chief executives in 2005, although they still act as special advisers to the board. They have committed to selling their stakes, a combined 16.3%, to Thoma Bravo and will make £218m and £250m respectively.

The chief executive, Kris Hagerman, will make £16.4m from selling his 0.57% stake, while Nick Bray, the outgoing chief financial officer, will pocket £1.7m from his 0.06% holding.

Sophos is the latest UK company to be taken over by an overseas firm taking advantage of the fall in the value of sterling since the Brexit vote in June 2016. The London-based money transfer company WorldFirst was sold to Ant Financial, controlled by the Chinese billionaire Jack Ma, reportedly for £520m.

“Another day, another takeover of a UK company by a foreign business,” said Russ Mould, investment director at stockbroker AJ Bell. “Sterling weakness has made pound-denominated assets look cheap and so we’ve seen many overseas firms pounce on UK assets in the past few years.”

Sophos makes software to protect organisations against cyberattacks and there has been strong demand for its products in recent years. However, in January it warned that growth was slowing.

As well as the NHS, its 400,000 clients around the world include the animation studio Pixar, the carmaker Ford, the retailer Under Armour, the aerospace and defence firm Northrop Grumman and Japanese conglomerate Toshiba.

Sophos also caters for many small and medium-sized firms, arguing that its security software is made simple so firms without sophisticated IT departments can be well protected.

Thoma Bravo has acquired more than 200 software and technology companies during its 40-year history. It said the existing Sophos management and employees would be key to the business’s success going forward. Bray announced his departure earlier in the year and a search for a successor is under way.

“Today marks an exciting milestone in the ongoing journey of Sophos,” said Hagerman. “Sophos is actively driving the transition in next-generation cybersecurity solutions, leveraging advanced capabilities in cloud, machine learning, APIs [application programming interface], automation, managed threat response and more.”

By Julia Kollewe

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