Darktrace to be bought by Thoma Bravo for $5.3 billion

Cybersecurity firm Darktrace on Friday became the latest business to quit the London Stock Exchange after it unveiled a $5.3 billion deal to be acquired by US private equity firm Thoma Bravo.

The offer of 620p per share represents a 20% premium on yesterday’s closing share price and marks a rekindling of the firm’s relations with Thoma Bravo with whom it had previously entered into informal takeover talks in 2022, before discussions were abandoned.

Cambridge-based Darktrace, which first listed on the LSE in 2021, today lashed out at the sorry state of the London public markets, complaining that its financial achievements “had not been reflected commensurately in its valuation” with its shares being consistently undervalued relative to US peers.

“The Darktrace board recognises that there are risks to, as well as uncertainty as to the timing and delivery of, shareholder returns on the public market,” the firm added.

Darktrace said the deal with Thoma Bravo would allow it to expand more quickly into overseas markets.

CEO Poppy Gustafsson said: “This proposed offer represents the next stage in our growth journey and I am excited by the many opportunities we have ahead of us.

“Our technology has never been more relevant in a world increasingly threatened by AI-powered cyberattacks. In the face of this, we are expanding our product portfolio, entering new markets, and focused on delivering for our customers, partners and colleagues."

Thoma Bravo said the deal “represents an attractive opportunity to increase its exposure to the large and growing cybersecurity market, and to invest to accelerate Darktrace’s continued development and further scale the business globally.”

The deal also represents an opportunity for Darktrace to cut ties with billionaire investor Mike Lynch, who stands to net around £170 million from his 4% stake in the business.

The company has sought to distance itself from Lynch, one of the first investors in the business, who last year was extradited to the US as the entrepreneur faces criminal charges over Hewlett Packard’s $11 billion acquisition of his software company Autonomy in 2011. Lynch has denied any wrongdoing.

Companies worth about £100 billion are on the way out of the London Stock Exchange so far this year, either by being bought up or via moving the main home for their shares overseas, and experts fear there is much more to come.

Research by the Evening Standard and investment bank Peel Hunt shows that companies worth over £26 billion have already agreed to be sold in 2024, to other listed firms or private equity.