Sophos To Sell Majority Stake To Apax Partners


Security and data protection company Sophos said Tuesday that it signed a deal to sell off the majority of its business to private equity group Apax Partners for $830 million.

While Apax Partners will retain the bulk of the assets, Sophos founders Jan Hruska and Peter Lammer will get a "significant minority" shareholding in the company at the conclusion of the transaction. Meanwhile, TA Associates, a Sophos minority shareholder since 2002, will sell its full interest to Apax Partners.

Executives implied that they are leaving on a high note, given that the company has a strong cash flow, $260 million in sales revenues for 2010, more than $330 million in billings.

In addition, executives tout that the company falls into second place behind McAfee for data protection suites, and third behind Symantec and McAfee in endpoint suites.

"As the market continues its migration from point solutions to tailored, unified security suites, Sophos' strategy to offer the world's most resilient, cost-effective solutions without any additional complexity remains key," said Sophos CEO Steve Munford, in a statement.
"Apax's financial backing, combined with Sophos' deep understanding of security and data protection is great news for our customers, prospects and partners. It is also a testament to the effort of all those who helped bring Sophos to where it is today."

Apax Partners, which backs and bolsters enterprise companies with long-term equity financing, invests in a range of sectors, including retail and consumer, tech and telecom, media, health care, and financial and business services.

Executives at Apax Parters said that they tagged the security software space as an "attractive investment" and a strong growth area, in light of the fact that businesses continually face an exponentially increasing amount of malicious threats such as botnets, Trojans and viruses every day.

"We are delighted to have the opportunity to back Sophos as well as its excellent CEO and management team," said Salim Nathoo, tech and telecom team partner at Apax Partners. "Sophos is a very strong platform and is gaining market share. Apax's strong track record and industry-specific knowledge in the technology sector makes Sophos a perfect fit, and we look forward to working closely with this high-growth business going forward."