Private equity giant Thoma Bravo LLC is reportedly considering a bid today to acquire British cybersecurity firm Darktrace Plc.
Although no offer has yet been made, Darktrace said in a regulatory filing that talks have taken place over a possible deal and an offer may follow.
Darktrace chief executive Poppy Gustafsson said in a statement that discussions are at a “preliminary stage” and there is no certainty that an offer will be made. Reuters reported that Thoma Bravo had until September 15 to make an offer on the company or walk away.
Cambridge-based Darktrace sells a cybersecurity platform that uses artificial intelligence to detect threats in enterprise cloud environments, employee devices and other systems. It uses soft sensors to understand the tasks that each system performs as part of a company’s daily routine business activity. Darktrace’s AI models identify breaches by looking for anomalous actions that differ from the usual daily activity mapped by its sensors.
Whenever it discovers a potential threat, Darktrace’s platform isolates the suspect system and limits it to the normal day-to-day tasks it usually performs. The company claims that this tactic blocks malicious activity while minimizing business interruption.
Darktrace notably has ties to Mike Lynch, the British software entrepreneur who has been charged with 14 counts of conspiracy and fraud in connection with the $11.6 billion sale of his former company Autonomy to Hewlett-Packard. Co. in 2011.
In January, the UK authorized Lynch’s extradition to the US, after months of legal wrangling. Lynch, who strongly denies any wrongdoing regarding the sale of Autonomy, helped found Darktrace in 2013. He remained a director of the company until 2018 when he stepped down, although he continued to serve on its advisory board until 2021.
Darktrace went public via an initial public offering on the London Stock Exchange in April 2021 and its value skyrocketed over the following three months. However, the stock has since faded and is now trading below its IPO price, despite jumping 17% on today’s news of Thoma Bravo’s interest.
Thoma Bravo has spent billions of dollars on acquisitions this year, buying up public companies he believes may be undervalued given the current economic climate. Its most recent deal saw it pay $2.8 billion to acquire Ping Identity Holding Corp. at the beginning of the month. In April, it spent $6.9 billion to buy cybersecurity firm SailPoint Technologies Holdings Inc., a month after paying $10.7 billion to acquire Anaplan Inc., which sells business planning software .
Holger Mueller of Constellation Research Inc. said private equity firms are taking a keen interest in developments in the cybersecurity software industry, as seen with previous acquisitions of Thoma Bravo. “Private equity firms traditionally shy away from any plans for serial acquisitions in order to form a much bigger player, but his interest in Darktrace is certainly going in that direction,” Mueller said. “We need to see first whether Thoma Bravo completes this acquisition or not, and if so, we may well see even more acquisitions and some synergy or business play.”
In Thoma Bravo’s biggest deal in recent memory, he paid $12.3 billion to acquire another cybersecurity company, Proofpoint Inc., in April 2021.