UK security firm Darktrace is to be acquired by US private equity firm Thoma Bravo in a $5.3 billion deal that's being seen as a blow to the London Stock Exchange (LSE).
Founded in 2013, Darktrace is headquartered in Cambridge and has 9,400 customers worldwide for its ActiveAI Security Platform, which monitors and responds to threats across cloud, apps, email, endpoint, network and operational technology. The company listed on the London Stock Exchange in 2021.
Darktrace CEO Poppy Gustafsson said the deal will accelerate the company’s growth and create more jobs in the UK.
"This proposed offer represents the next stage in our growth journey and I am excited by the many opportunities we have ahead of us," Gustafsson said.
"Our technology has never been more relevant in a world increasingly threatened by AI-powered cyber attacks. In the face of this, we are expanding our product portfolio, entering new markets, and focused on delivering for our customers, partners and colleagues."
This is the second time that the company has been in negotiations with Thoma Bravo, which walked away from takeover talks in 2022.
"Darktrace is at the very cutting edge of cybersecurity technology, and we have long been admirers of its platform and capability in artificial intelligence. The pace of innovation in cybersecurity is accelerating in response to cyber threats that are simultaneously complex, global and sophisticated," said Andrew Almeida, a partner at Thoma Bravo.
"Darktrace is driven by a culture of innovation, and we are excited by the opportunity to work alongside Darktrace’s team and accelerate its development into a scaled, global leader, further strengthening its capability and offer to customers."
However, in a statement, Darktrace said it doesn't believe that it's been accurately valued in the past, with the offer representing a premium of 20% over its closing share price.
"Whilst the Darktrace board remain confident that Darktrace's strategy can continue to deliver attractive returns for shareholders and that Darktrace has a strong future as a public company, the Darktrace board believes that Darktrace's operating and financial achievements have not been reflected commensurately in its valuation with shares trading at a significant discount to its global peer group," the company said.
One shadow that's hung over Darktrace's head is its association with British tech entrepreneur Mike Lynch, one of the company's early backers. He is now standing trial in San Francisco accused of conspiracy and wire fraud relating to the sale of Autonomy to HP in 2011.
However, the proposed takeover is being seen as an indication that the UK is increasingly, and worryingly, losing company listings to the US.
“Darktrace is one of the bright spots in the UK technology landscape and as such, the company’s decision to go private is disappointing news, particularly for London’s listings market," said Russ Shaw CBE, founder of Tech London Advocates and Global Tech Advocates.
"To sustain our position as a key global tech hub - and ultimately, deliver national economic growth - it is absolutely vital that our most innovative companies view the capital as an attractive destination."
