It's been one blow after another for the London Stock Exchange, this time with a private equity deal in UK-based cybersecurity firm Darktrace.
The Cambridge-based company agreed on Friday to be acquired by America's Thoma Bravo in a deal worth 4.3 billion pounds ($5.32 billion).
Thoma Bravo is an investment firm with over $138 billion in assets under management and focuses exclusively on software trading. With the acquisition of Darktrace, Thoma Bravo plans to accelerate the growth of the AI and cybersecurity company founded in 2013.
“This proposed offer represents the next stage in our company's growth journey, and we are excited about the many opportunities ahead of us,” CEO Poppy Gustafsson said in a statement. .
As a result, an increasing number of UK-listed companies are being acquired by private equity groups. For example, in October, US-based private equity firm Apollo Global Management acquired the Wagamama restaurant chain group for £506 million, according to the paper. financial times.
The Darktrace acquisition has not yet been approved by shareholders, and if approved, the companies said the deal would be tentatively completed by the end of this year.
Darktrace shares were up 17.6% as of 1pm London time.
Losing UK-based Darktrace is a huge blow given that the company was a shining example of British influence in cutting-edge technology. The company's stock price has soared since listing on the London Stock Exchange in 2021, rising 84% since then, but it has had its share of problems.
The UK-based cybersecurity expert was in talks with Thoma Bravo in 2022, but those talks broke down.
The company's board said Darktrace's success is not reflected in its current valuation because Darktrace's stock trades lower than its peers.
“The proposed offer represents an attractive premium and an opportunity for shareholders to secure cash consideration at the fair value of their shares,” Gordon Hurst, chairman of Darktrace's board of directors, said in a release announcing the transaction. ''.
tricky history
Analysts believe the company is lagging behind its U.S. rivals for a variety of reasons. That includes supporting Mike Lynch, the controversial businessman currently on trial in the United States on charges of fraud against Hewlett-Packard.
His investment firm, Invoke Capital Partners, was a founding investor in Darktrace. Autonomy, which Lynch founded and sold to HP in 2011, was once a admired technology company in Britain, but HP's numbers exploded after it was sold in an $11 billion deal. He claimed to have grown up. Autonomy's CFO was sentenced to five years in prison in 2018, a charge Lynch denies.
Some former Autonomy employees, including CEO Poppy Gustafsson, are part of Darktrace, but they are not involved in Lynch's trial.
Still, it was difficult for the Cambridge-based company to completely distance itself from its past relationship with Lynch. Last year, Darktrace became a target of short sellers who claimed there were holes in the company's accounts. Among the issues raised was the relationship between British companies and Autonomy.
Darktrace was stripped of its clean sheet in July after an investigation into the company by Big Four accounting firm EY.
