Thoma Bravo acquires cybersecurity AI company Darktrace for $5.3 billion

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On April 26, Thoma Bravo, a private equity giant headquartered in Chicago, announced that it had agreed to acquire Darktrace, a British cybersecurity AI company, for US$5.32 billion.

Thoma Bravo's agreed purchase price of 620 pence per share ($7.75 per share) represents a 20% premium to Darktrace's closing price of 517 pence per share ($6.50 per share) on Thursday, April 25, and a premium to Darktrace's three-month closing price. The average share price premium is 44%. The company's shares have doubled in the past year and surged 18% after the takeover bid was announced.

Thoma Bravo partner Andrew Almeida said Darktrace is at the forefront of cybersecurity. “Thoma Bravo has been investing in software for more than 20 years, and we will leverage our platform, operational expertise and deep cybersecurity experience to support Darktrace's growth,” Almeida said.
Founded in 2013, Darktrace mainly uses artificial intelligence to detect attacks and vulnerabilities within IT networks. The company listed in London in April 2021 at $3.13 per share, and despite being the best performer among recent London-listed companies, the company's share price has lagged behind its U.S. peers.

In February 2022, Darktrace acquired attack surface management company Cybersprint for $53.7 million to provide customers with insights that help eliminate blind spots and detect risks. The acquisition is intended to enrich existing Darktrace products with external vulnerability data and accelerate Darktrace into new areas such as proactive AI cybersecurity.

In 2022, Thoma Bravo had intended to discuss acquisitions with Darktrace, but the negotiations eventually broke down because Darktrace's board of directors rejected Thoma Bravo's acquisition proposal before agreeing to the transaction. The statement said that the board of directors believes that the company's share price is undervalued and that the cash acquisition can provide investors with certainty.

Despite factors such as the economic downturn and internal challenges, Darktrace's valuation has increased nearly 2.5 times since its listing. The company's quarterly sales for the quarter ended March 31 rose 26.5% year over year to $176.1 million, and it expects revenue to grow at least 25.5% in the fiscal year ending June 30, 2024.

Analysts have mixed reviews about Darktrace’s technology. Forrester ranked Darktrace 11th out of 13 vendors evaluated for its network analysis and visibility capabilities. Forrester praised Darktrace for simplifying the deployment process with point-and-click functionality, but said the company's user interface focused on flash over functionality, with confusing visualizations and limited visibility into network traffic.

Reference sources:

Thoma Bravo to buy UK’s Darktrace for around $5.3 bln

Thoma Bravo to Buy Cybersecurity AI Firm Darktrace for $5.3B

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