US private equity firm Thoma Bravo to acquire UK cybersecurity company Darktrace for $5.3 billion in cash

Thoma Bravo, a US private equity firm known for its aggressive acquisitions, has made another big move in the market. Today, they announced their agreement to purchase UK cybersecurity company Darktrace for $5.32 billion in cash. Thoma Bravo aims to leverage its expertise in software to fuel growth for Darktrace, which counts Mike Lynch among its backers.

This move follows Thoma Bravo’s recent acquisition of SailPoint, another cybersecurity firm, for $6.9 billion, and Anaplan, an enterprise software company, for $10.7 billion in March.

As part of the deal, Thoma Bravo will pay $7.75 per share, representing a 44% premium over Darktrace’s average share price for the past three months. Darktrace’s stock, which has doubled in the last year, surged by 18% to 608 pence following the announcement, Reuters reported.

Andrew Almeida, a partner at Thoma Bravo, emphasized Darktrace’s position at the forefront of cybersecurity. He stated, “Thoma Bravo has been investing exclusively in software for over 20 years, and we will leverage our platform, operational expertise, and extensive cybersecurity experience to support Darktrace’s growth.”

In early April, Darktrace revised its forecasts upward for the third time this year, citing increasing demand amidst the growing threat of digital attacks.

We previously covered Darktrace in 2021 when the company debuted on the London IPO, valuing it at $2.4 billion. Despite being one of the top performers among recent listings in London, Darktrace’s stock has not kept pace with its U.S. counterparts, partly due to concerns surrounding Lynch. Lynch is currently facing fraud charges in the United States related to his former company Autonomy, which he has denied.

Harvey Robinson, an analyst at Panmure Gordon, noted that the current stock price doesn’t reflect potential synergies and could attract interest from a buyer like Palo Alto. Thoma Bravo had previously approached Darktrace in 2022, but discussions didn’t lead to an offer.

According to a statement, Darktrace’s board turned down previous offers from Thoma Bravo before agreeing to the deal. The board believed that the company’s shares were undervalued and that a cash offer provided certainty to investors.

In August 2023, Thoma Bravo acquired identity and access management software firm ForgeRock for $2.3 billion in an all-cash transaction. The acquisition involved a merger with Ping Identity, a cybersecurity firm that Thoma Bravo had acquired the previous year for $2.4 billion.

Darktrace was founded in 2013 by Poppy Gustafsson, Dave Palmer, Emily Orton, Jack Stockdale, and Nicole Eagan with the backing of entrepreneur Mike Lynch. Darktrace uses artificial intelligence to identify and mitigate cybersecurity threats within IT networks.

The company’s founders, backed by Lynch, brought together a talented group of mathematicians and AI experts from the University of Cambridge to pioneer innovative AI applications, including self-learning systems.