Thoma Bravo’s $5.32 Billion Deal with Darktrace Sets New Standards in AI Cybersecurity Investments, Shares Jump 19%
Darktrace's cybersecurity software. Photo by Michael S. Williamson/The Washington Post via Getty Images.
Key Takeaways
- Thoma Bravo has inked a $5.32 Billion deal to take Darktrace private.
- The acquisition reflects the software investors’ rising focus on AI and cybersecurity.
- Previous acquisitions in the space include Sophos and Proofpoint.
With the rising prevalence of AI threats, the field of cybersecurity is responding in like, developing new AI tools to protect organizations’ cyber assets. Accordingly, leading AI cybersecurity firms have become hot property, as evidenced by Thoma Bravo’s £4.2 billion ($5.32 billion) Darktrace takeover.
One of the biggest jewels in the UK’s AI crown, Darktrace went public in 2021, when it raised £1.2 billion at £2.50 per share. Three years later, Thoma Bravo’s acquisition, which is still pending regulatory approval, values the company at nearly double its IPO price.
Darktrace Shareholders Profit From AI Boom
Founded in 2013, Darktrace has emerged as one of the leading players operating at the intersection of cybersecurity and AI.
In a sector in that has attracted billions of dollars in the last few years, companies with an established customer base and profitable business model are extremely attractive to investors.
After a volatile few years for Darktrace stock, the Thoma Bravo deal represents a significant premium on Thursday’s closing price and shares rallied by over 19% when the London Stock Exchange opened on Friday morning.
The Financial Times reported that Darktrace’s board previously reviewed and rejected offers from Thoma Bravo and the 2 parties entered negotiations in 2022 but never finalized a deal.
Thoma Bravo Leans Into AI Software Trend
Founded in 2008, Thoma Bravo has made software buyouts its specialty, closing over 465 deals in the space since its inception.
As it looks to capitalize on rising demand for intelligent software solutions, the US-based private equity firm has added several companies with an AI slant to its portfolio in recent years.
Although acquisitions like EQ, Everbridge and Hypergene aren’t first-and-foremost AI companies, they are increasingly integrating machine learning into their respective platforms. And Thoma Bravo has made AI a central part of its software investment strategy.
A Track Record of Profitable Cybersecurity Investments
The Darktrace deal closely resembles Thoma Bravo’s acquisition of the cloud-focused cybersecurity firm Barracuda Networks, which it took private for $1.6 billion in 2018. Barracuda turned out to be a savvy investment and it was sold to KKR for about $4 billion in 2022.
Likewise, in January 2019, the firm acquired Imperva for $2.1 billion before selling it to Thales Group for $3.6 billion 4 years later.
Other cybersecurity companies in its portfolio include its Sophos, which it acquired for $3.9 billion in 2020 and Proofpoint, which was purchased for $12.3 billion in 2021.
Like Darktrace, Sophos and Proofpoint have a reputation for integrating cutting-edge AI tech into their products, equipping users with the capabilities to identify threats, protect data and accelerate regulatory compliance automatically.
