UK cyber firm Sophos (SOPH) accepts $3.8bn takeover bid from Thoma Bravo

As Sophos accepts Thoma Bravo’s takeover bid from Joe Healey, Investment Research Analyst at The Share Centre, explains what it means for investors.

Article updated: 14 October 2019 9:00am Author: Joe Healey

  • Deal values British cyber security group at £3.1bn
  • Shares rise 37% in early trading on the back of the announcement
  • The deal is the latest in a wave of investments and the first outside of the US for Thoma Bravo

Investors have welcomed the news from network security firm Sophos this morning on its acceptance of the takeover bid from the US private equity firm Thoma Bravo. The US private equity firm offered $7.40 per share, valuing the deal at £3.1bn including net debt.

For Sophos shareholders, the offer represents a good deal. Despite the shares peaking at around £6.50 at the beginning of 2018, tough market conditions dragged the share price to around £2.65 earlier this year. The 37% premium offered represents a strong source of future value for shareholders and is definitely a favourable offer.

In a rapidly evolving industry, the cybersecurity market is continuously driven by innovation and technological advancements. The prominence of cyber threats within the corporate landscape has grown considerably over the past decade. Businesses have realised the threat that outdated cybersecurity infrastructure poses as cyber-attacks become more frequent and complex. Businesses of all size now actively spend to develop and improve these network security systems offering huge market capture potential which is why it’s no surprise that Thoma Bravo is continuing to build its exposure in this specialised area.

With Thoma Bravo’s strong track record in supporting its investments long-term success there is no reason why this takeover can’t be another solid addition to its ever-growing portfolio.

Joe Healey

Investment Research Analyst

Following his completion of the graduate scheme, Joe is an Investment Research Analyst covering equities. He holds a BA Hons Business Management degree and is currently studying towards CFA Level II after passing CFA Level I in June 2019.