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Sophos valued at a billion

by on26 June 2015

IPO good to go if there are not any bugs

Security Outfit Sophos has told the world it is worth a billion pounds as it head to what will be the largest flotations by a technology company in the UK.

The company, which majority-owned by private equity group Apax Partners, said the shares will be priced at 225p which will raise $125m. This is more than it had planned when the company announced its intention to float on the London Stock Exchange earlier this month.

Sophos is a good bet to do well. People are extremely interested in security after high-profile hacking of key companies. But Sophos has developed a niche by targeting products at small and medium-sized companies, which typically cannot employ huge IT teams on-site and require simpler and cheaper options than those adopted by large corporate entities.

But there are some nay-sayers saying nay.

Analysts at Megabuyte, the research group, said in a note that it was "a little perplexed" with the "toppy" valuation for Sophos, saying such a high level was sustainable only if the company could continue to accelerate its revenue growth.

It is the third time that Sophos has attempted an IPO. It was forced to pull plans to list in 2007 at the last minute when the financial crisis hit.
It considered a float again two years later but but co-founders Jan Hruska and Peter Lammer opted instead to sell a majority stake to Apax in 2010 through a deal that valued the company at about $830m.

Sophos said the proceeds of the IPO will help reduce its net debt, which stood at $318m at the end of April, as well give it "greater financial flexibility to drive the future growth of the business".

Sophos has gone a little dark lately after losing its media friendly spokesman Graham Cluely. In the Good old days Sophos was mentioned everywhere thanks mostly to Cluely being widely quoted everytime there was a security story.

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