Apax moves in on Sophos

Endpoint security vendor ditches IPO plans after selling majority stake to Apax Partners

Steve Munford: Apax's financial backing is great news for our partners

Sophos founders Dr Jan Hruska and Peter Lammer are set to net a cool $300m (£197m) as a result of the firm’s majority takeover by Apax Partners.

Apax has grabbed a 70 per cent stake in the endpoint security specialist, which was set up 25 years ago by the pair after they met as Oxford University engineering students.

The deal values Sophos – which had previously considered raising capital by going down the IPO route - at $830m.

Dr Hruska stressed he and his partner would remain on board as directors and “substantial shareholders” and would do “everything in our power to contribute to its success in the future”.

With 2010 revenues standing at $260m, Sophos is relatively small compared with endpoint security juggernauts McAfee and Symantec.

However, chief executive Steve Munford stressed it had been growing at a 27 per cent cumulative annual growth rate over the past three years.

“Apax's financial backing, combined with Sophos's deep understanding of security and data protection is great news for our customers, prospects, partners,” he added.

Apax has a track record in the technology sector, with previous investments including interactive learning vendors Promethean World and SMART Technologies.

Salim Nathoo, a partner in the Tech & Telecom team at Apax Partners, said: “We identified the security software space as an attractive investment area for us given its rapid growth driven by ever increasing malware threats and high barriers to entry. Sophos is a very strong platform and is gaining market share.”