UK cybersecurity company Darktrace agrees to $5 billion privatisation deal from Thoma Bravo

Darktrace, a cybersecurity and AI company based in Cambridge, is poised to join the list of British technology champions acquired by US firms. The company has agreed to a $5.3 billion (£4.25 billion) sale to US private equity business Thoma Bravo.

The all-cash offer was tabled by Luke Bidco Ltd, a newly formed entity under Thoma Bravo, and it values Darktrace at £6.20 ($7.75) per share. This represents a 44% increase in its average share price for the three months ending April 25.

Darktrace has long maintained that its operating and financial achievements have yet to be adequately reflected in its valuation, with shares trading at a significant discount to its global peer group.

The delisting will serve as another big blow to the London Stock Exchange which has lost multiple big names to the US.

Recent departures include the chipmaker Arm Holdings, the gambling company Flutter, and the building materials business CRH. Shell and miner Anglo American are also reportedly seeking a good exit offer.

Founded in 2013, Darktrace gained recognition for its cutting-edge AI technology, which detects and neutralizes cyber threats within IT networks.

The deal also marks a significant development in the ongoing legal saga involving Darktrace's co-founding investor, Mike Lynch, who is currently on trial for fraud and conspiracy in the US. Lynch, owns 6.8% of Darktrace with his wife, Angela Bacares, and stands to make just under £300 million from the sale of their shares.

This could potentially help fund Lynch's legal defense as he fights allegations related to selling his previous business, Autonomy, to Hewlett-Packard in 2011 at a total cost of $11.1bn. Lynch is being accused of overvaluing the company by $8.8bn.

However, seeing as Lynch has no formal role at Darktrace, his case has had no consequences in the cybersecurity company acquisition deal.

“This proposed offer represents the next stage in our growth journey and I am excited by the many opportunities we have ahead of us. Our technology has never been more relevant in a world increasingly threatened by AI-powered cyber-attacks,” Darktrace’s chief executive, Poppy Gustafsson said of the deal.

“In the face of this, we are expanding our product portfolio, entering new markets, and focused on delivering for our customers, partners, and colleagues.”

The completion of the acquisition is subject to shareholder approval, but both Darktrace and Thoma Bravo anticipate finalizing the transaction by the end of 2024.