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.
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".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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".
-
UK-US trade deal announced: US cuts tariffs on UK car imports to 10%Keir Starmer and Donald Trump have announced a UK-US trade deal, but the US president has refused to lift baseline tariffs on most UK goods. What does it mean for the UK?
-
How to use mid-caps to diversify from the USMedium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.
