Thomas Bravo to take British cybersecurity firm Darktrace private in $5 billion deal

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Darktrace is set to be taken private in a deal that values ​​the UK-based cybersecurity giant at about $5 billion.

A newly formed company called Luke Bidco Limited, founded by private equity giant Thomas Bravo, has submitted an all-cash bid of £6.20 ($7.75) per share, which represents a three-month This represents a 44% premium over the average price. However, this premium falls to just 20% compared to Darktrace's closing price on Thursday, as the company's share price was up 20% last month to £5.18.

Founded in 2013 in Cambridge, UK, Darktrace is best known for its AI-enabled smart threat detection, which uses machine learning to identify anomalous network activity and attempts such as ransomware attacks, insider attacks, and data breaches. I am. The company's major customers include Allianz, Airbus, and the City of Las Vegas.

After raising approximately $230 million in VC funding and reaching a private valuation of $1.65 billion, Darktrace will be listed on the London Stock Exchange in April 2021 with a day-one valuation of $2.4 billion. It became. The company's share price hit an all-time high of £9.45 later that year, before plummeting to an all-time low of £2.29 in February last year. However, it has been steadily rising since the start of the year and has not fallen below 4 pounds since early March.

The full valuation under Thoma Bravo's proposal would be $5.3bn (£4.25bn) on a so-called fully diluted basis. This basis takes into account all convertible bonds and is designed to provide a more comprehensive view of a company's valuation. However, the enterprise value in this case is approximately $4.9bn (£4bn), which includes additional considerations such as debt and cash position.

take private

There has been a spate of “going private” deals recently, with Vista Equity this month announcing plans to acquire revenue optimization platform Model N in a $1.25 billion deal, its fifth in 18 months. This will be a delisting transaction. And last month, Thoma Bravo announced he was taking his critical event management software company Everbridge private in a $1.8 billion deal.

In an investor relations document released Friday, Thoma Bravo said iDarktrace is an “attractive opportunity to increase exposure” to the burgeoning cybersecurity market.

“Darktrace is at the forefront of cybersecurity technology, and we have long admired its platform and artificial intelligence capabilities,” said Andrew Almeida, partner at Thoma Bravo. “The pace of innovation in cybersecurity is accelerating in response to simultaneously complex, global and sophisticated cyber threats.”

Separately, Darktrace said it had previously rejected an approach from Thoma Bravo on the grounds that the offer was too low, something that the two companies have apparently resolved in the revised bid. Thing.

Darktrace Chairman Gordon Hurst said: “The proposed offer represents an attractive premium and represents an opportunity for shareholders to secure cash consideration at the fair value of their shares.” “The proposed acquisition will give Darktrace access to a strong financial partner in Thoma Bravo with deep expertise in the software sector, and will position the company as a best-in-class cyber AI business headquartered in the UK. You will be able to increase your

The deal, of course, requires shareholder approval, but the companies said they expect to complete the transaction by the end of 2024.