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On 8 September 2022, Thoma Bravo that it no longer intends to make an offer for Darktrace plc.

Less than a month prior, on 15 August 2022, artificial intelligence cybersecurity firm Darktrace the speculation that Thoma Bravo had made a number of preliminary and conditional proposals and that it was in the early stages of discussions with the US-based private equity firm regarding a possible cash offer for the entire share capital of Darktrace (see: Darktrace’s future appears murky as Thoma Bravo considers takeover).

Darktrace, once viewed as the crowning jewel of the UK tech industry prior to its less than satisfactory IPO on the Main Market of the London Stock Exchange, still remains an attractive target for companies looking to sure up their cybersecurity as a result of hybrid working following the coronavirus (COVID-19) pandemic and increasing concerns regarding geopolitical risk especially following the ongoing Ukraine conflict. However, the possible offer by Thoma Bravo did reignite concerns about the raid on UK-listed companies by foreign bidders due to their competitive valuations compared to other jurisdictions (for more information, see: Private equity pounces on UK companies in recent takeover bids). Despite this, Thoma Bravo decided to walk away from the possible takeover giving no reason for its decision. 

It appears investors did not take kindly to the news that Thoma Bravo no longer intends to bid for Darktrace as the cybersecurity company’s shares plummeted 35% after the news to £3.37, entirely erasing the 24% increase in share price gained after the August 2022 announcement of the possible offer. However, following the termination of the takeover talks between the two companies, a seemingly unphased Darktrace :

‘The Board continues to be very confident in the Company's future prospects as demonstrated by its FY22 results released today… Darktrace remains unrelentingly focused on its mission to free the world of cyber disruption and, thereby, enhance its position as a global leader in cyber security artificial intelligence.’

Thoma Bravo’s decision to pull out of the deal coincided with the of Darktrace’s first full-year results as a public company. The FTSE 250 company reported ‘strong operating and financial performance resulting in significant [45.7% year-over-year revenue] growth’. A well-timed announcement which may work to appease concerned investors and perhaps entice another suitor since the cybersecurity firm still remains an attractive takeover target due to the current geo-political climate. Darktrace’s share price recovered 12% following the release of its strong FY22 results, despite the company having to admit to an accounting mistake where it determined that £3.3m ($3.8m) of revenue it recognised in FY22 to April 2022 was actually related to previous periods in FY21. The company confirmed that despite the mistake, the combined revenue of both years ‘remains unchanged’ and the company remains an attractive target.