Thoma Bravo has officially completed its $5.3 billion acquisition of Darktrace, a prominent British cybersecurity firm, bringing an end to a turbulent period marked by leadership changes and the tragic death of key investor Mike Lynch.
A Turbulent Transition
The acquisition process has been anything but smooth. Just weeks before the deal closed, Darktrace’s CEO Poppy Gustafsson unexpectedly resigned. Gustafsson, who co-founded Darktrace in 2013, announced she would transition to a non-executive director role after the acquisition. In her resignation statement, she expressed pride in what the company achieved during her decade-long tenure.
“I am immensely proud of everything we have achieved in that time,” Gustafsson said.
Adding to the turmoil, Mike Lynch, an influential early backer of Darktrace, died in August when the yacht he was on sank in a storm in the Mediterranean, taking six other lives with him. Lynch’s death reopened discussions surrounding his unresolved civil suit related to the $11.7 billion acquisition of his former company, Autonomy, by Hewlett Packard Enterprise (HPE) in 2011.
Leadership Shake-Up
In the wake of Gustafsson’s resignation, Jill Popelka, the company’s COO, took over as CEO. Popelka joined Darktrace only this January and has previous experience at Snap, Accenture, and SAP SuccessFactors. She stated, “Protecting businesses with best-in-class AI-powered cybersecurity will remain at the core of what we do,” highlighting a commitment to advancing the company’s technical capabilities.
Following the leadership changes, Darktrace also saw all non-executive directors resign from its board, creating further uncertainty. However, the exact details regarding Gustafsson’s position post-resignation remain unclear, as a representative for Darktrace has yet to provide clarification.
Impact on the London Stock Exchange
Thoma Bravo’s acquisition of Darktrace is seen as a blow to the London Stock Exchange, which has faced several large companies opting to go private or list on rival exchanges. The exit of Darktrace highlights ongoing challenges for the exchange as it struggles to retain major firms.
“Darktrace holds a unique position at the forefront of cybersecurity technology,” said Seth Boro, a managing partner at Thoma Bravo. He emphasized the company’s early adoption of AI technology, stating its capabilities are evident to various stakeholders globally.
Mike Lynch’s Legacy
Lynch was instrumental in Darktrace’s early days, funding the company through his venture capital firm Invoke Capital. He played a significant role in placing key personnel at Darktrace, including his former protégé Gustafsson. At the time of his passing, Lynch held about a 3% stake in Darktrace.
Tragically, the acquisition saga was further marred by the death of Stephen Chamberlain, a co-accused of Lynch in a U.S. criminal trial, who was struck by a car on the same day the yacht sank.
Financial Scrutiny
Darktrace faced scrutiny last year from short-sellers, particularly a U.S. hedge fund called Quintessential Capital Management, which raised questions about the company’s financial statements. However, an independent investigation by EY concluded that there was no need for Darktrace to amend its financial records, a finding that did not deter Thoma Bravo from proceeding with the acquisition.
Looking Ahead
With the acquisition now finalized, Thoma Bravo aims to leverage Darktrace’s unique position in the cybersecurity market. The firm is committed to enhancing Darktrace’s capabilities and expanding its reach in protecting businesses from increasingly sophisticated cyber threats.
In conclusion, despite the challenges and changes in leadership, the acquisition of Darktrace marks a significant step for Thoma Bravo as it continues to invest in promising tech companies. As the cybersecurity landscape evolves, the combined efforts of Thoma Bravo and Darktrace will be closely watched by industry insiders and investors alike.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna Sahu holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.
