With its on-off IPO no nearer happening, UK security company Sophos has opted to sell a majority stake to private equity house, Apax Partners.
The deal will see Apax acquire a 70 percent stake in the business on a valuation of $830 million (approx £546 million), made up of a mixture of roughly $400 million equity and about $180 million in debt. Investors TA Associates will sell its stake in the company, acquired in 2002, as part of the buy-in.
Longer term, the IPO is still in the works, Techworld understands, and this will be a possible exit for Apax Partners down the line.
The men who founded the company as long ago as 1985, Jan Hruska and Peter Lammer, will be paid handsomely for their toil, while retaining a 30 percent stake for the day when an IPO or sale happens. They count as pioneers of the antivirus industry that has since grown from niche obscurity into a global business covering a wide palette of security systems beyond antivirus software.
According to CEO, Steve Mumford, the deal should not make any difference to the customers beyond the fact that the company will have more access to investment to reinforce the business.
The fact that a private company has made the terms of such a deal public at all is undoubtedly a necessary transparency given the IPO ambition. Short term, however, the deal looks like a clever way of making a lot of money for the founders – this probably explains the debt pile – while the IPO remains out of reach.