Payday for Lynch as Darktrace agrees £4.2bn buyout

‘The UK needs to protect its economic and legal sovereignty, not be bullied by US interests’

MIKE LYNCH, the British tech entrepreneur on trial over an alleged multibillion-dollar fraud, is in line for a £300m payday from the US takeover of cyber-security company Darktrace.

The business is to be bought by private equity firm Thoma Bravo for £4.2bn in a deal that will deliver a financial boost to Mr Lynch, who owns almost 7pc of the company along with his wife, Angela Bacares.

They have sold down their stake significantly in recent months but their holdings are worth £298m under the $7.75 (£6.21) a share takeover price.

Mr Lynch, a founding investor in Darktrace and former board member at the Cambridge-based company, is in the middle of a US criminal trial over the $11bn sale of his technology company, Autonomy, in 2011.

Mr Lynch criticised the prospect of a Darktrace takeover two years ago when Thoma Bravo first considered buying the business. At the time, he said US authorities’ “vindictive pursuit” of him had depressed the company’s share price and left it vulnerable, adding: “Another bright light in the British tech scene will be lost.

“The UK needs to stand up for its entrepreneurs and protect its economic and legal sovereignty, not be bullied by US interests.”

He did not comment on the sale yesterday. Mr Lynch and Autonomy’s former finance director, Stephen Chamberlain, are six weeks into a San Francisco trial over fraud charges that can carry decades in prison. Both have pleaded not guilty and Mr Lynch is expected to testify in the coming weeks.

Autonomy was sold to Hewlett Packard in 2011 but a year later HP executives accused the company’s former management of accounting improprieties. Mr Lynch was charged in 2018, leading him to step down from Darktrace’s board and Mr Chamberlain to leave the company, where he was its chief operating officer.

Darktrace shares leapt by 17pc to 605p yesterday after the deal was announced. Thoma Bravo said it would keep Darktrace’s Cambridge headquarters and its research operations in the UK. Its chief executive, Poppy Gustafsson, who stands to make almost £24m from the sale, will continue in her role. Nicole Eagan, the company’s former chief executive, is due to make £69m from the deal.

The sale will be seen as another blow to the London Stock Exchange’s attempts to encourage technology companies, and comes just three years after Darktrace went public.

Announcing the deal, Darktrace said the company had been undervalued by stock market investors.

Thoma Bravo said it had support from Darktrace’s biggest investor KKR, as well as Summit Partners, which own around 11.3pc between them.