If you’ve never heard of Sophos, you might be wondering how it’s just been bought for £3.1 billion – here’s everything you need to know about the takeover of the UK-based cyber security firm, and whether Brexit is behind the sale.
What is Sophos?
Sophos is a British security software and hardware company. It develops products for communication endpoint, encryption, network security, email security, mobile security and unified threat management and is arguably most well-known for assisting the NHS and other businesses during the 2017’s WannaCry ransomware attack.
Based in Abingdon, near Oxford, the company was founded in 1985 by Jan Hruska and Peter Lammer, who still act as special advisers to the board despite stepping down as joint chief executives in 2005, and now employs 3,400 staff.
What is happening to Sophos?
Sophos is being bought for £3.1 billion by Thoma Bravo, a San Francisco-based private equity firm, after its bid was unanimously accepted by the board, who have seen their shares jump from 225p when the company was floated in 2015, to 585p in line with the bid from the US.
Thoma Bravo also owns a stake in the McAfee, the US-based cyber security firm.
Peter Gyenes, chairman of Sophos, said the takeover ‘secures the delivery of future value for shareholders today’ thanks to Thoma Bravo’s ‘deep sector expertise’.
He added: ‘Under Thoma Bravo’s ownership we expect Sophos to accelerate its evolution and leadership in next-generation cybersecurity,’ he added.
Is Brexit behind the takeover?
Sophos is one of a number of UK companies that have recently been taken over by foreign firms, seemingly taking advantage of drop in the value of the pound. The value of sterling has dropped since the Brexit vote in 2016, and this weakness is being exploited by overseas firms who are keen to snap up such assets when they are potentially at their cheapest.
And business owners are willing to sell, not least because they know they could have a depreciating asset on their hands, particularly if the Brexit forecasts are to be believed.
Sophos is the perfect example of this – despite a strong demand for its products and services, it warned that growth was slowing. This could be part of an overall trend across the UK economy, or just a natural dip after a period of rapid growth, but it’s clear that business owners have been spooked by Brexit and feel now is a good time to cash in.
And since the deal in is dollars, the value of the deal could be different depending on what happens with Brexit.
Although it seems like good news for Sophos shareholders, its bad news for the London market, which is losing yet more tech stock.