Darktrace plc, a major provider of cybersecurity software for enterprises, today announced that it has agreed to be acquired by Thoma Bravo in a $5.3 billion transaction.

The all-cash deal values Darktrace at $7.75 per share, a 20% premium over its last unaffected stock price. Thoma Bravo says KKR and other shareholders with a combined 14.4% stake in the software maker have agreed to back the transaction. To close the deal, the private equity firm will need the support of Darktrace investors with at least 75% of the company’s shares.

“Thoma Bravo has been investing exclusively in software for over twenty years and we will bring to bear the full range of our platform, operational expertise and deep experience of cybersecurity in supporting Darktrace’s growth,” said Thoma Bravo partner Andrew Almeida.

Darktrace launched in 2013 and went public on the London Stock Exchange eight years later. Today, the company says that more than 9,400 organizations use its flagship product, a cybersecurity platform called the ActiveAI Security Platform. The software uses artificial intelligence to block cyberattacks across cloud environments, employee devices and technology assets. 

One subset of the platform’s features focuses on helping companies fix security weaknesses in their infrastructure. According to Darktrace, its algorithms can spot not only code vulnerabilities but also cases where an enterprise might be susceptible to social engineering attacks. Cybersecurity teams can use the software to launch simulated campaigns and evaluate how employees respond.

After detecting a cyberattack, the ActiveAI Security Platform can automatically take steps to block it. The software is capable of taking actions such as stopping malicious file downloads without manual input from administrators. According to Darktrace, cybersecurity teams also have access to AI-generated automation workflows for recovering systems targeted by hackers.

The company’s platform produces an incident report about every cyberattack it spots. The report details what actions the hackers took, in what order and which systems were affected. Cybersecurity teams can use that data to inform their breach remediation efforts, as well as identify ways of improving their company’s incident response workflows.

Increased customer demand for Darktrace’s software boosted its revenue by 26.5% year-over-year last quarter, to $176.1 million. The company also raised its forecast for its current fiscal year ended June 30. This financial momentum, which Darktrace partly credited to a recent revamp of its go-to-market strategy, likely contributed to the 20% premium Thoma Bravo has offered for its shares.

The private equity firm previously sought to acquire Darktrace in 2022. No deal was signed because the software maker found Thoma Bravo’s offer to be too low.

The acquisition is set to close in the second half of 2024. From there, Thoma Bravo will make investments to enhance Darktrace’s cybersecurity capabilities and grow its market presence. The private equity firm said that there will be “no material restructurings or changes to Darktrace’s Cambridge, U.K. headquarters” and its other business operations.

Thoma Bravo added that it will use its “M&A expertise to grow” the company’s cybersecurity platform, which suggests that it plans to enhance the software through acquisitions. Darktrace has made only once acquisition since launching: the €47.5 million purchase of Cybersprint B.V. in 2022. Netherlands-based Cybersprint developed a platform designed to help companies find and fix vulnerabilities in their infrastructure.

Photo: London Stock Exchange/Twitter