It’s NOT about the money
. . . insists boss of cyber security firm Sophos as he agrees takeover that lands founders £470m and him £45m
THE Oxford University scientists behind Sophos will make £470m in a deal that will see their cybersecurity company taken private by a foreign predator.
Dr Peter Lammer and Dr Jan Hruska, who founded the firm in 1985, will make £251m and £219m respectively if US private equity firm Thoma Bravo’s £3bn takeover goes ahead.
The pair are no longer in charge but have kept stakes in the company and backed the 583p per share offer.
The bid was also supported by the Sophos board, including chief executive Kris Hagerman, who will pocket £45m.
Sophos’s shares jumped 35.6pc, or 151.5p, to 577p.
The deal would see the company delisted from the London Stock Exchange, just four years after its £1bn float, and taken private again.
Hagerman, 55, said Thoma Bravo’s bid represented a 37pc premium on Sophos’s closing share price on Friday – but insisted the deal was ‘not about the money’.
He claimed Sophos would be better placed to expand under the US firm, which has promised to allow the company to stay independent and based at its current headquarters in Abingdon, Oxfordshire.
Speaking about the board’s decision to back the takeover bid, Hagerman said: ‘It was not about the money. We took into consideration all of our stakeholders. But shareholders should, and have to, come first. That is what we are in business for.’
The deal would make Sophos the latest British tech star to fall into foreign hands, as well as the latest big company to de-list from London’s stock exchange in a private equity mega-deal.
Defence giant Cobham, brewer Greene King, satellite firm Inmarsat, Alton Towers owner Merlin Entertainments and used car seller BCA Marketplace are also set to be de-listed under separate deals.
Thoma Bravo said it expected no ‘material’ change to Sophos’s 3,500- strong workforce but a spokesman refused to rule out job losses.
Sophos sells software that protects IT systems from hacking attacks and so- called ‘ ransomware’, which is used by criminals to infect computers and then demand money from their owners.
Lammer, 60, and Hruska, 62, founded it together in a semidetached house after meeting at Oxford University.
They turned Sophos into one of Europe’s biggest cyber security firms, winning customers such as Vodafone, Lockheed Martin and Heinz in the early 2000s. After abandoning attempts to float the business in 2007 and 2009, they sold a majority stake to private equity firm Apax Partners in a takeover reportedly worth £660m but retained more than one third of the company’s stock. They are understood to have made about £79m in that deal.
And as Apax floated the company in 2015, when Lammer and Hruska still owned 27.4pc, they made another £31.9m each by selling shares.
It means that if Thoma Bravo’s takeover proceeds, the pair will have made about £692m from the business between them.
Separately, Hagerman is expected to make £16.5m from shares he owns and another £28.5m from various share options he is entitled to receive.
According to Sophos’s annual reports, the American chief executive – who joined in 2012 – has been paid a total of £28.7m over the past five years.
Technology-focused Thoma Bravo’s swoop comes as private equity firms and other foreign predators circle British firms firms. Last month, the Office for National Statistics revealed takeovers of British companies by foreign buyers more than doubled in value in the second quarter of the year.
Russ Mould, investment director at AJ Bell, said British businesses were particularly attractive to foreign rivals at the moment because the weak pound had made them cheaper.