Darktrace could be the latest high-profile name to leave the London Stock Exchange after it agreed to a $5billion (£4.3billion) takeover bid by a US private equity firm.
The cybersecurity company has agreed terms with Thoma Bravo, which tried to snap up Darktrace two years ago until talks broke down.
Thoma Bravo is now offering £6.20 per share, 20 per cent higher than Darktrace’s closing price on Thursday and a 44.3 per cent premium to its average share price over the past three months.
Takeover bid: Cybersecurity company Darktrace has received an offer from US private equity firm Thoma Bravo, which tried to snap up Darktrace two years ago
It believes the acquisition represents an ‘attractive opportunity’ to boost its presence in the cybersecurity sector, accelerate the group’s growth and boost the development of artificial intelligence products.
The Chicago-based firm already has investments in dozens of software developers, such as British business Sophos, a security software seller it bought for £3billion four years ago.
If Thoma Bravo buys Darktrace, it would mark another blow for London’s shrinking public markets, which have recently lost multiple prominent companies to foreign buyers.
Well-known acquisitions in the past few years have included G4S, Hotel Chocolat, Dechra Pharmaceuticals, supermarket chain Morrisons, and fashion brand Ted Baker.
UK-listed firms are perceived as easy targets for takeover due to their perceived undervaluation compared to rival global peers and the pound’s depreciation since the Brexit referendum.
Darktrace told investors on Friday that its financial and operational accomplishments have not been ‘reflected commensurately’ in its valuation.
Gordon Hurst, chairman of Darktrace, said: ‘The offer represents an attractive premium and an opportunity for shareholders to receive the certainty of a cash consideration at a fair value for their shares.’
Darktrace shares jumped 17.5 per cent to 607.4p on early Friday afternoon following the deal’s announcement, more than twice their 250p flotation price.
Its share price has undergone significant turbulence since listing in April 2021, initially rising to over £10 before plunging after broker Peel Hunt alleged Darktrace was significantly overvalued.
Later on, the company was targeted by short-sellers ShadowFall and Quintessential Capital Management, with the latter accusing it of questionable accounting practices.
An independent probe by auditor EY highlighted ‘a number of areas’ where Darktrace could make improvements but said none of the firm’s previous financial statements required correction.
Headquartered in Cambridge, Darktrace uses artificial intelligence in software to protect organisations against cyber threats, such as ransomware, email phishing, and software-as-a-service attacks.
Its clients have included the Royal Mint, satellite operator OneWeb, cruise giant Royal Caribbean, and the power generation provider Drax Group.
Entrepreneur Mike Lynch, who is standing trial in San Francisco accused of fraud at Autonomy, a company he sold to HP in 2011, was one of Darktrace’s early backers.
Lynch, who has pled not guilty to 16 counts of conspiracy and wire fraud, and his wife stand to make around £300million should Thoma Bravo buy Darktrace.
Dan Ridsdale, head of technology at Edison Group, said: ‘The [takeover] deal is certainly a blow for the UK stock market, which is losing one of its few structural growth technology companies of significant scale.
‘Ultimately, a market which is underweight structural growth will underperform those in which it is well represented, and that is what we have seen from the UK over the past number of years.’
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