US private equity firm in swoop for British tech company Darktrace
A US private equity firm has launched a multibillion-pound takeover bid for the cybersecurity company Darktrace in the latest American raid on British tech.
Darktrace said this evening that it is in the early stages of negotiations with Chicago-based Thoma Bravo, which previously bought fellow UK cyber company Sophos for £3.1bn in 2019.
Darktrace – which was founded by entrepreneur Mike Lynch, who is fighting fraud allegations at a separate business – said that there was no guarantee a deal would go ahead.
Shares in Darktrace closed trading on Monday at 414.8p before the potential deal was announced, up 7pc since January and around 70pc higher than its April 2021 float price of 250p.
Its market cap is £2.8bn. The company did not say how much Thoma Bravo is offering.
Founded by Mr Lynch in 2013, Darktrace’s unique selling point is its AI-powered cybersecurity tools.
Company marketing materials say its products allow a greater speed of detection and response than traditional enterprise cybersecurity products, which rely on relatively greater human input.
The bid comes after Angela Bacares, Mr Lynch’s wife, herself a major shareholder, earned an eight-figure sum by gradually running down her stake over the past year.
While tech stocks around the world have been in decline since November 2021 as Covid lockdowns weakened consumer demand, recent weeks have seen a general rally across the board.
Darktrace itself has remained broadly steady since the start of the year as companies rushed to buy cybersecurity software amid the Ukraine war and Russian cyber aggression.
Mr Lynch, who is no longer involved in running Darktrace, was also the founder of another AI-powered business, Autonomy.
He sold Autonomy to Hewlett Packard in 2011 for $11bn (£9bn), only for HP to write down its value by $8.8bn. The resulting High Court trial saw multiple fraud findings entered against Mr Lynch, as well as the judge ruling that a serving Darktrace executive, Nicole Eagan, was “part of a clique” involved in the frauds.
Mr Lynch is set to appeal against the High Court’s May judgment after a later decision about financial damages is handed down.
He is also fighting extradition to the US on criminal charges.
Darktrace said: “Discussions are at a preliminary stage and there can be no certainty that any offer will be made, nor as to the terms of any such offer.”
