26th Apr 2024 15:07
(Alliance News) - The bid for Darktrace PLC from Thoma Bravo LP is a blow for the London stock market, an analyst on Friday said.
On Friday, Darktrace said it has agreed to an all-cash takeover offer worth USD5.32 billion from funds managed by private equity firm Thoma Bravo.
Cambridge, England-based Darktrace is a cybersecurity provider. Chicago-based Thoma Bravo focuses on software investments.
Thoma Bravo offered USD7.75 in cash per Darktrace share. This is equivalent to 620 pence, a 20% premium to Darktrace's close in London on Thursday. It also is more than double Darktrace's initial public offering price of 250p back in 2021.
Shares in FTSE 250-listed Darktrace were up 20% to 619.20p on Friday.
Darktrace directors will unanimously recommend the offer to shareholders, and Thoma Bravo already has commitments to accept from shareholders representing 14.4% of the company.
The offer values all of Darktrace's equity at USD5.32 billion and implies an enterprise value of USD4.99 billion, taking into account Darktrace's cash and borrowings. The acquisition will be conducted as a scheme of arrangement.
Thoma Bravo "firmly believes that the acquisition will benefit Darktrace, Darktrace's customers, and the wider technology ecosystem through supporting the development of enhanced products and Darktrace's cybersecurity capability," the two companies said.
Dan Ridsdale, head of technology at Edison Group said the deal is "certainly a blow for the UK stock market, which is losing one of its few structural growth technology companies of significant scale."
"Ultimately, a market which is underweight structural growth will underperform those in which it is well represented, and that is what we have seen from the UK over the past number of years," he added.
This highlights the need for reforms such as pension reform, a British ISA and removing stamp duty to reinvigorate our markets, he felt.
However, he thought it was an "oversimplification" to blame the UK markets specifically.
He pointed out the company’s discount to peers is in part because Darktrace is smaller than this peer group.
In fact Darktrace would still be categorised as a small cap in the US and small cap markets globally have not kept up with big cap, he explained.
The other challenge is that it is difficult to reinvest back into the business to accelerate growth being in the listed sphere, whereas Thoma Bravo are explicitly investing to help accelerate Darktrace’s development, he remarked.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Related Shares:
Darktrace