Thoma Bravo is set to take British cybersecurity firm Darktrace private in a $5 billion deal

Dark trail is about to go private in a deal that values ​​the British cybersecurity giant at around $5 billion.

A newly formed entity called Luke Bidco Ltd, formed by private equity giant Thoma Bravo, has made an all-cash offer of £6.20 ($7.75) per share, representing a 44% premium to the average price over the period of three months. ending April 25. However, this premium drops to just 20 percent when compared to Darktrace's closing price yesterday, as the company's shares were up 20% in the past month to £5.18.

Founded in Cambridge, UK, in 2013, Darktrace is best known for its AI-powered smart threat detection methods, which use machine learning to identify abnormal network activity and attempted ransomware attacks, insider attacks, data breaches and more. The company claims major customers including Allianz, Airbus and the city of Las Vegas.

After raising approximately $230 million in venture capital funding and a private valuation of $1.65 billionDarktrace went public on the London Stock Exchange in April 2021, with a opening day valuation of $2.4 billion. The shares reached an all-time high of £9.45 later that year, before plummeting to an all-time low of £2.29 last February. But they had risen steadily since the turn of the year and have not fallen below £4 since early March.

The full valuation based on Thoma Bravo's offer is $5.3 billion (£4.25 billion) on what is known as a fully diluted basis, which takes into account all convertible securities and is intended to provide a to provide a more comprehensive picture of the valuation of a company. However, the enterprise value in this case is approximately $4.9 billion (£4 billion), including additional considerations such as debt and cash positions.

Take it privately

There's been a slew of take-private deals lately, with Vista Equity this month announcing plans to acquire revenue optimization platform Model N in a $1.25 billion deal – the fifth take-private deal in 18 months. And last month, Thoma Bravo revealed that critical event management software company Everbridge was taking it private in a $1.8 billion transaction.

In a investor relations document published today, Thoma Bravo said iDarktrace represented an “attractive opportunity to increase its exposure” to the fast-growing cybersecurity market.

“Darktrace is at the forefront of cybersecurity technology and we have long been admirers of the platform and its capabilities in artificial intelligence,” said Thoma Bravo Partner Andrew Almeida. “The pace of innovation in cybersecurity is accelerating in response to cyber threats that are simultaneously complex, global and sophisticated.”

In addition, Darktrace said it had previously rejected approaches from Thoma Bravo on the grounds that the bids were too low – something the duo has now clearly resolved with the amended offer.

“The proposed offer represents an attractive premium and an opportunity for shareholders to receive the certainty of cash compensation at fair value for their shares,” said Darktrace Chairman Gordon Hurst. “The proposed acquisition will give Darktrace access to a strong financial partner in Thoma Bravo, with deep expertise in the software sector, who can strengthen the company's position as a best-in-class cyber AI company headquartered in the UK”

The deal still needs to be approved by shareholders, of course, but the companies said they expect to close the transaction by the end of 2024.

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