Feeds

Apax buys control of Sophos for $830m

Trebles all round

Intelligent flash storage arrays

Updated Apax Partners has bought a majority stake in UK-based net security firm Sophos in a deal announced on Monday valuing the company at $830m.

Dr Jan Hruska and Dr Peter Lammer, who co-founded Sophos 25 years ago, will retain a significant minority shareholding, reportedly valued at $300m. TA Associates, a minority shareholder in Sophos since 2002, is selling all its shares to the Apax Partners private equity firm as part of the deal.

Sophos said its revenues for the year ending March 31 2010 were $260m in 2009 compared to $213m in FY2009 with a cash flow of $55m. The firm's blue chip clients include Cisco, Marks and Spencer, Heinz and Harvard University.

The transaction is being funded two-thirds by equity and one third by debt. "These debt levels are very modest given Sophos’ strong cash flow. Over the past three years, Sophos has prospered operationally and financially, growing our revenues at a 27 per cent cumulative annual growth rate and generating strong cash flow," a Sophos spokeswoman explained. "Sophos will continue to have a significant ability to make acquisitions based on the financial resources of the investment funds managed by Apax Partners."

Both Sophos and Apax said the deal was good for customers, prospects and partners. Apax backed Sophos' existing management team.

Salim Nathoo, a partner in the tech and telecom team at Apax, said: “We identified the security software space as an attractive investment area for us given its rapid growth driven by ever increasing malware threats and high barriers to entry.  Sophos is a very strong platform and is gaining market share."

Apax's previous telecoms investments include global satellite operators Inmarsat and Intelsat and interactive learning firm Promethean World. Sophos had reportedly been planning to launch an IPO in 2007 but shelved those plans due to the poor financial outlook at the time. Over recent years the firm has looked to international sales to maintain its growth, moving the hub of its marketing operation from Oxford to Boston in a bid to meet these objectives.

The firm sells exclusively to enterprises. Sophos’s flagship endpoint security and data protection product offers anti-virus, anti-spyware, client firewall, host intrusion prevention, network access control, application control, device control, disk encryption and data leak prevention functions. ®

Top 5 reasons to deploy VMware with Tegile

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.