Cybersecurity company Darktrace (DARK) has received a preliminary offer from US private equity group Thoma Bravo, sending its shares up over a fifth on Tuesday morning. Darktrace is trading at around half its 2021 peak of 985p a share.
In the announcement, the company said there was “no certainty the offer will be made”. Thoma Bravo now has just under a month to announce an intention to make a firm offer, under the takeover code.
Since the war in Ukraine broke out in February, increasing the fear of cyber-attacks, there have been number of deals in the industry. Google (US:GOOGL) purchased cyber security firm Mandiant for $5.4bn (£4.5bn) in March. In April, Thoma Bravo announced a $6.9bn go-private deal for identity access management business SailPoint. At the time it represented a 48 per cent premium to SailPoint's price.
Dakrtrace’s share price has been volatile since it listed on the London Stock Exchange last April. By October 2021, its share price had almost trebled from its listing value to 945p but after a bearish note published by broker Peel Hunt it dropped back down to around 400p.
The share price may also have been hampered by directors selling significant stakes in the business after the IPO lock-up period ended. In March, director Vanessa Colomar sold £5.25mn-worth of shares having sold £9.23mn-worth in November last year – at the end of the IPO lock-up period.
There was no valuation attached to the potential offer announcement, although Darktrace confirmed it would be an all-cash deal.
Peel Hunt said the market was over competitive – citing 26 other vendors – when it published its sell note. Thoma Bravo may feel that with its larger security portfolio it could combine businesses to create a more comprehensive security offering and take a larger chunk of the market than Darktrace could do alone. If that’s the case, the price could be ahead of the 20 per cent premium on Monday's closing price the market is currently forecasting.
