Darktrace's Share Value Plummets as Thoma Bravo Buyout Falls Through

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British AI cybersecurity vendor Darktrace will not be acquired by US private equity firm Thoma Bravo.

In a statement to the London Stock Exchange (LSE) on Thursday 8, 2022, Darktrace said "discussions with Thoma Bravo have terminated,” putting an end to the £6bn ($6.9m) deal that could have been one of the most significant M&A of 2022.

Darktrace had entered discussion in August regarding a possible takeover by the equity giant, giving Thoma Bravo until September 12, 2022 to announce a firm intention to make an offer for Darktrace or not, in accordance with the UK’s City Code on Takeovers and Mergers, as reported by Infosecurity Magazine.

The buyout fell through hours before the Cambridge-based company said that millions of pounds in revenue had been wrongly recognized in this year's accounts instead of last year’s and made a £3.3m ($3.8m) accounts restatement

On the night of Wednesday September 7, Thoma Bravo pulled out of talks, saying “an agreement could not be reached on the terms of a firm offer.” The Telegraph confirmed that the US equity firm “was not aware of the accounts restatement.”

On September 8, the British firm released its first financial results report as a publicly traded company, on the same day Darktrace’s shares plunged 31% in value to 346 pence a share.

In 2012, Darktrace co-founder Mike Lynch was accused of inflating the value of his previous company Autonomy, which was sold to Hewlett Packard in 2011 for $11bn. He is fighting extradition to the US on fraud charges.

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