Advertisement

Sophos: US scoops up another UK success story

British cybersecurity company Sophos is a successful company with good prospects. So it’s no surprise that the American private-equity firm Thoma Bravo has offered £3.1bn for it.

Sophos sign

British cybersecurity company Sophos is a "homegrown success story" with "good prospects", says the Financial Times. So it's not surprising that the American private-equity firm Thoma Bravo has offered £3.1bn for it. Those who bought the stock when it floated in 2015 have more than doubled their stake.

While there will be the inevitable "hand wringing" at the idea of a British tech firm being taken over by a foreign company, fears of losing local tech expertise are "overdone": Thoma Bravo intends to keep Sophos as a standalone business.

Advertisement - Article continues below

It's easy to see why Thoma Bravo is interested in Sophos, says Liam Proud for Breaking- views. Its network of 45,000 sales partners, such as regional computer shops and consultants, which sell its products to businesses, means that the new owner "can buy up other products and turbocharge sales by pushing them out to Sophos's distributors". Still, the American fund is having to pay a "punchy" 37% premium, implying that the company is valued at "almost six times last year's revenue".

Thoma Bravo is the latest US firm attracted to the UK by the low value of the pound and restrained stockmarket valuations, says Simon Duke in The Times. However, Sophos's shareholders should be "wary" of hanging on "in the hope of a counterbid". This deal is backed by Sophos's founders and Apax Partners, its biggest shareholder, and Thoma Bravo already owns Sophos's biggest competitor, Barracuda. It's "hard to see other funds wanting to lock horns with this powerful suitor".

Advertisement
Advertisement

Recommended

Visit/517688/the-british-equity-market-is-shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
Visit/511212/reasons-for-investors-to-be-bearish-but-stick-with-the-stockmarket-bulls
Stockmarkets

There are lots of reasons to be bearish – but you should stick with the bulls

There are plenty of reasons to be gloomy about the stockmarkets. But the trend remains up, says Dominic Frisby. And you don’t want to bet against the …
17 Jul 2019
Visit/510684/good-news-on-jobs-scares-stockmarkets
Economy

Good news on jobs scares US stockmarkets

June brought the best monthly US jobs growth of the year, but stockmarkets were not best pleased.
11 Jul 2019
Visit/510135/trade-war-ceasefire-boosts-stockmarkets
Economy

Trade-war ceasefire boosts stockmarkets

Stockmarkets sighed with relief after the G20 summit in Japan brought a handshake between Donald Trump and Xi Jinping.
4 Jul 2019

Most Popular

Visit/investments/commodities/industrial-metals/601401/money-printing-infrastructure-base-metals-copper
Industrial metals

Governments’ money-printing mania bodes well for base metals

Money is being printed like there is no tomorrow. Much of it will be used to pay for infrastructure projects – and that will be good for metals, says …
27 May 2020
Visit/investments/investment-strategy/601389/are-you-a-permabear-three-red-flags-to-watch-out-for
Investment strategy

Are you a permabear? Three red flags to watch out for

Contrarian investors are often seen as bearish because the market tends to go up over time. But if that bearishness goes too deep, you risk seriously …
26 May 2020
Visit/economy/eu-economy/601422/heres-why-investors-should-care-about-the-eus-plan-to-tackle-covid-19
EU Economy

Here’s why investors should care about the EU’s plan to tackle Covid-19

The EU's €750bn rescue package makes a break-up of the eurozone much less likely. John Stepek explains why the scheme is such a big deal, and what it …
28 May 2020