View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
  2. Cybersecurity
September 8, 2022updated 12 Sep 2022 4:39am

Private equity fund Thoma Bravo ends talks over Darktrace takeover

Discussions about a buyout at the UK cybersecurity pioneer had been ongoing since last month.

By Matthew Gooding

Private equity fund Thoma Bravo will not pursue its interest in Darktrace, it was announced this morning, causing the value of shares in the UK cybersecurity pioneer to plummet.

Darktrace has ended takeover talks with Thoma Bravo. (Photo by T. Schneider/iStock)

Darktrace said in a statement that following talks between the companies, revealed last month, an offer would not be forthcoming from US-based Thoma Bravo.

“Discussions with Thoma Bravo were first announced on 15 August in response to media speculation, after Darktrace had received a number of unsolicited, preliminary and conditional proposals from Thoma Bravo,” a Darktrace statement said. 

“Consistent with its fiduciary obligations to consider any credible proposal which may be capable of recommendation to Darktrace shareholders, early-stage discussions took place with Thoma Bravo about a possible offer for the company but an agreement could not be reached on the terms of a firm offer.”

Share price dips as Darktrace takeover talks are shelved

The news, which came in conjunction with Darktrace’s annual financial results, was not well received by the stock market, with the company’s share price falling from 514p at the close of trading on Wednesday, to 354p at the time of writing.

Darktrace’s results for the 2022 financial year show that its revenue grew 45.7%, to $415m. Earnings before deductions were $64m.

“The Board continues to be very confident in the company’s future prospects as demonstrated by its FY22 results released today,” the Darktrace statement added.

Headquartered jointly in Cambridge and San Francisco, Darktrace uses unsupervised AI to map its customers’ systems and build up a picture of normal behaviour within those systems, which evolves over time as the company changes. This then allows its software, which it calls the Enterprise Immune System, to spot anomalies and detect and respond to cyberattacks as they happen. 

Content from our partners
The growing cybersecurity threats facing retailers
How to integrate security into IT operations
How Kodak evolved to tackle seismic changes in the print industry and embrace digital revolution

It floated on the London Stock Exchange last year, and has announced a series of deals with businesses around the world since. Its results today show that it has 7,400 customers, a 32% year-on-year increase.

But while Darktrace has been hailed as a tech success story, its links to Mike Lynch, the entrepreneur who has been a driving force behind the company and remains a major investor, have proved problematic. Lynch, once dubbed the “British Bill Gates”, stepped down as an adviser to Darktrace earlier this year as he battles allegations of fraud relating to the 2011 takeover of his former company, Autonomy, by HPE in 2011.

In January it was announced Lynch had lost a long-running court case with HPE and could be made to pay damages running into billions of dollars, while he is also fighting extradition to the US to face criminal charges over the deal.

Capital Monitor is hosting the second part of its Webinar series, Making Sense of Net Zero, alongside New Statesman and Tech Monitor on September 21. Find out more information on NSMG.live.

Read more: The cybersecurity implications of the Russia-Ukraine conflict

Websites in our network
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED
THANK YOU