Sophos to Raise £100m From Stock Market Float
Sophos, the cyber security business, is seeking to raise £100m from what could be one of the London stock market's largest technology floats. The Abingdon-based group, which offers IT protection to medium-sized firms, expects to make its debut as a public company next month and is targeting a premium listing on the main market.
Richard Holway, chairman of TechMarketView, said Sophos could secure a valuation of between $1.5bn (£1bn) to $2.5bn in the listing, which would make it "the biggest tech IPO in the UK of all time". Management declined to comment on the market capitalisation that is being targeted.
It marks the third time the company has considered an initial public offering. Sophos pulled a float in 2007 when the financial crisis was brewing, and in 2009 a second attempt was scrapped after private equity house Apax swooped on the company and bought a majority stake for £372m.
A Government-commissioned report by PwC found that the average 'starting costs' for a major security cyber attack at large organisations has increased to £1.46m, up from £600,000 in 2014.
Sophos said that the IT security market was worth $32.6bn and is expected to grow by 7pc each year until 2018. The mid-market segment it targets accounted for $18bn of cyber security spending in 2014. Now that the company has announced its intention to float, it could attract a bidder, industry experts suggested.
Sophos, which employees 2,500 people worldwide, will use the money raised from the IPO to cut debt. Net borrowings amounted to $318.8m at the end of April. Revenues rose by 22.6pc to $476m in the 12 months to the end of March, and Sophos posted so-called "cash ebitda" of $101.4m, up from $97m a year earlier. JPMorgan Cazenove and Morgan Stanley will act as joint global coordinators on the share sale.
