US private equity group Thoma Bravo to buy Abingdon-based company, which has 3,400 staff

This article is more than 11 months old

This article is more than 11 months old

The UK cybersecurity firm Sophos, which assisted the NHS and a number of businesses during a massive WannaCry ransomware attack two years ago, is to be bought by a US private equity group for $3.9bn (£3.1bn).

The FTSE 250 company, which is based in Abingdon near Oxford and employs 3,400 people, said it would unanimously recommend the offer from Thoma Bravo. It is the first acquisition outside the US for the San Francisco-based buyout firm. Sophos shares jumped 37% to 585p, in line with the bid terms of $7.40p a share (583p).

Sophos floated at 225p in June 2015, valuing the firm at just over £1bn, in one of the biggest technology IPOs in the UK that year. It was its third attempt at going public.

The company was founded in 1985 by Jan Hruska and Peter Lammer, who stepped down as joint chief executives in 2005, although they still act as special advisers to the board. They have committed to selling their stakes, a combined 16.3%, to Thoma Bravo and will make £216m and £248m respectively.

The chief executive, Kris Hagerman, will make £16m from selling his 0.57% stake, while Nick Bray, the outgoing chief financial officer, is in line for £1.6m from his 0.06% holding.

Sophos is the latest UK company to be taken over by an overseas firm taking advantage of the fall in the value of sterling since the Brexit vote in June 2016. Among other recent deals were Hasbro snapping up Peppa Pig owner Entertainment One for £3.3bn and Hong Kong’s richest person, Li Ka-shing, buying pubs group Greene King for £2.7bn, both in August.

“Another day, another takeover of a UK company by a foreign business,” said Russ Mould, investment director at stockbroker AJ Bell. “Sterling weakness has made pound-denominated assets look cheap and so we’ve seen many overseas firms pounce on UK assets in the past few years.”

Sophos makes software to protect organisations against cyberattacks and there has been strong demand for its products in recent years. However, in January it warned that growth was slowing.

As well as the NHS, its 400,000 clients around the world include the animation studio Pixar, the carmaker Ford, the retailer Under Armour, the aerospace and defence firm Northrop Grumman and Japanese conglomerate Toshiba.

Sophos also caters for many small and medium-sized firms, arguing that its security software is made simple so firms without sophisticated IT departments can be well protected.

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Thoma Bravo has acquired more than 200 software and technology companies during its 40-year history. It said the existing Sophos management and employees would be key to the business’s success going forward.

The private equity house will carry out a six-month review of the business but indicated that a major restructuring and material job losses were unlikely. Sophos is also likely to remain headquartered in Abingdon. Bray announced his departure earlier in the year and a search for a successor is under way.

“Today marks an exciting milestone in the ongoing journey of Sophos,” said Hagerman. “This is validation of the position Sophos has established. Next-generation cybersecurity is over half of the business and growing at 30% a year – cloud management, machine learning, artificial intelligence, automation, and the synchronisation of different security components so they actively talk to each other.”