Heh, I didn't realize they sold those. I got some a couple years ago as a freebie, not sure it was worth the amount of sophos marketing crap I got for the next year or so after I gave them my contact info.
I have multiple legit emails for that exact reason. We had a competition to see who could get the most marketing rubbish at a university fair (this method meant I won, and also noticed an inverse correlation between academic prestige and marketing spending) and I never stopped.
Haha these are all amazing, definitely picking up some before they inevitably close it down. How is it possible that a security company makes better socks than many clothing companies? I mean, come on, you don't even have to be a huge tech nerd to appreciate Mr Miyagi's "Socks On Socks Off"
Bought by Thoma Bravo. Fits the pattern. You would think they would be trying to mash up some these companies to corner the SMB security market but they seem to keep all their companies distinct.
Or perhaps zero mess, and this is just a good way to acquire all the patents and later they can merge either the companies or the teams behind them to produce what TB envisions. Tha scarier name I saw in their companies' list is BlueCoat. That is some nasty (good nasty) stuff.
I am still (proudly) using the McAfee Antivirus Enterprise edition on my Win Pro machine. It has (imho) the best options/flexibility. I also remember that the respective firewall was also super strong and very versatile but I can't get my hands on any latest version of it (I have the AV legally).
My understanding is that Windows Defender is the only decent engine nowadays, but that's second-hand anecdata I can't measure the bias of (I don't currently use Windows).
I notice that the power of these new behemoths are a risk to SMEs. Kaseya/Datto/ITGlue/CWM/Automate/Sophos/BG/Sell... These all used to be of a size that could communicate and deal with small business. Far more focus weighted towards enterprise now.
So 3.9b / 600m Revenue = 6.5years horizon to breakeven.
Assuming no growth plan, they can hollow out the operating costs by cutting staff by 1/4, and offshoring another 1/4.
Guessing here, but their aim is a total return of +%30-%50 (~$2bn)over 10 years with relatively low risk vs. indexes or VC plays.
It works, but it's like putting a company into a digester.
I think Sophos has just a touch more to it than that. They have a great deal of product and technology and tens of thousands of customers. TB will be interested in growth here by aligning Sophos with its other security assets. I think Sophos is the jewel in the crown frankly. McAfee was the sausage.
If that's the case, the challenge will be retaining the key people responsible for Sophos's 'intellectual capital' and sales relationships. It can be extremely costly to keep people after a PE acquisition in cyber - combination of removing the equity incentives (e.g. stock will eventually vest for the top people, if it hasn’t already) plus being in a very hot market where poaching talent is common plus general erosion in conditions to service the debt from the LBO.
The cynic in me thinks TB knows cybersecurity will sell at even more ludicrous multiples in the future (and they’re swimming in dry powder), so they won’t need to care too much about the underlying health of the business. The optimist thinks that TB are the masters of this niche and see synergies I don’t.
Source: I’ve done DDs in this space and our firm’s (public) stance is to encourage organic growth over doing deals
Multiples of revenue is a common valuation number that can imply the length of time an investor will expect they will be able to profit from it.
At 66m/y in profit, that's under %2 annual return on their $4bn investment. To strip and flip the company on a 6-7 year timeframe would make sense. They'll probably need a technical CTO advising them on what's essential and what's not.
However, take us to school. The opportunity to add value is clear.
To add more specificity they now own Barracuda, Centrify, ConnectWise, idaptiv, imperva, imprivata, LogRythm, McAfee, solarwinds, Sophos, and Veracode in the "Current Investments" and "Security" sector defined on their own search filter[1].
"Cleaning up" is a phrase reserved for exits. Thoma Bravo is merely "acquisitive". They just raised a big new fund; it is common to have a couple of transactions lined up when raising a new fund so you can begin with a bang and deploy capital sooner rather than later.
