Darktrace is set to go private in a deal that values the U.K.-based cybersecurity giant at around $5 billion.
A newly-formed entity called Luke Bidco Ltd, formed by private equity giant Thoma Bravo, has tabled an all-cash bid of £6.20 ($7.75) per share, representing a 44% premium on its three-month average price ending April 25. However, this premium drops to 20% when compared to Darktrace’s closing price yesterday, as the company’s shares had risen 20% to £5.18 in the past month.
Founded in Cambridge, U.K., in 2013, Darktrace is renowned for AI-enabled threat detection capabilities, using machine learning to identify abnormal network activity and thwart ransomware attacks, insider attacks, data breaches, and more. The company boasts clients such as Allianz, Airbus, and the City of Las Vegas.
Following VC funding of $230 million and achieving a private valuation of $1.65 billion, Darktrace went public on the London Stock Exchange in April 2021, with an initial valuation of $2.4 billion. The company’s shares peaked at £9.45 and hit a low of £2.29, before steadily rising since the onset of the year, never falling below £4 since March.
The total valuation based on Thoma Bravo’s offer stands at $5.3 billion (£4.25 billion) on a full-diluted basis, while the enterprise value is approximately $4.9 billion (£4 billion) when considering debt and cash positions.
Take-private
Recent times have seen a surge in “take-private” deals, with Vista Equity announcing plans to acquire Model N in a $1.25 billion deal, and Thoma Bravo proceeding with a $1.8 billion transaction to privatize Everbridge.
In an investor relations document released today, Thoma Bravo highlighted Darktrace as an “attractive opportunity” to bolster its presence in the burgeoning cybersecurity market.
“Darktrace embodies cutting-edge cybersecurity technology, and we have long been impressed by its AI capabilities,” stated Thoma Bravo partner Andrew Almeida. “The cybersecurity landscape is rapidly evolving to combat complex, global, and sophisticated cyber threats.”
Darktrace disclosed that they had previously rejected Thoma Bravo’s offers due to low valuations, a concern which seems to have been resolved now with the revised bid.
“The proposed offer presents an attractive premium and the chance for shareholders to receive a fair cash consideration,” stated Darktrace chair Gordon Hurst. “The acquisition will provide Darktrace with a solid financial ally in Thoma Bravo, possessing extensive expertise in the software sector, to elevate the company’s status as a top-notch cyber AI firm headquartered in the U.K.”
The deal is subject to shareholder approval, with both companies anticipating completion of the transaction by the end of 2024.
