Darktrace, a U.K.-based cybersecurity giant, is on the brink of going private in a deal that values the company at approximately $5 billion. The offer, made by Luke Bidco Ltd, a newly formed entity by private equity firm Thoma Bravo, is set at £6.20 ($7.75) per share. This bid is a 44% premium on Darktrace’s average price over the past three months, although it drops to a 20% premium when compared to the closing price on the Thursday before the offer, due to a recent 20% rise in share value to £5.18.
Since its founding in Cambridge in 2013, Darktrace has become renowned for its AI-enabled cybersecurity technologies, which are capable of detecting a range of threats from ransomware to insider attacks. The company has secured major clients including Allianz, Airbus, and the city of Las Vegas. Darktrace went public on the London Stock Exchange in April 2021, achieving an opening-day valuation of $2.4 billion. Despite experiencing a peak share price of £9.45 and a low of £2.29 within a relatively short period, the shares had shown a steady rise since the beginning of the year.
Thoma Bravo’s acquisition offer places Darktrace’s valuation on a fully-diluted basis at around $5.3 billion, considering all convertible securities. The enterprise value, factoring in additional considerations like debt and cash positions, is pegged at about $4.9 billion. This move is part of a larger trend of take-private deals in the tech sector, with Thoma Bravo itself recently taking Everbridge private in a $1.8 billion transaction and announcing other similar acquisitions.
The decision to accept Thoma Bravo’s offer comes after Darktrace initially rebuffed earlier proposals, deeming them too low. The improved offer seems to have satisfied Darktrace’s valuation expectations, providing shareholders a substantial premium and a cash exit strategy. If approved by shareholders, the transaction is expected to be completed by the end of 2024, positioning Darktrace with a strong financial partner that boasts deep expertise in the software sector. This partnership is poised to fortify Darktrace’s standing as a leading cyber AI firm while ensuring it remains headquartered in the U.K.
