Thoma Bravo's $5.3 Billion Acquisition of Darktrace
Acquirer company: Thoma Bravo
Target company: Darktrace
Total transaction size: $5.3 billion (≈£4.2-4.3 billion)
Acquirer: Thoma Bravo
Thoma Bravo was founded in 2008 as a private equity firm by Carl Thoma and Orlando Bravo, headquartered in Chicago, Illinois, with additional offices across the United States and Europe. As of late 2025, the firm manages over $181 billion in assets under management across private equity, growth equity, and credit strategies, making it one of the world’s largest software-focused investment firms.
The firm specialises in acquiring and growing software and technology companies, typically pursuing control investments within key sectors like cybersecurity, infrastructure software, and fintech. Thoma Bravo has invested in approximately 565 software and tech companies with an approximate value of $285 billion.
Overall, Thoma Bravo is recognised as a specialist software buyout firm with a reputation for high-value tech-related transactions. This makes it a prominent acquirer in mergers and acquisitions in its industry.
Target: Darktrace
Darktrace is a British cybersecurity company founded in 2013 by mathematicians and cyber defence experts from tech investment company Invoke Capital. The firm was established to adopt a new approach to cybersecurity by leveraging artificial intelligence (AI) and machine learning (ML) to detect threats that traditional tools often miss.
Darktrace’s AI-driven cybersecurity solutions are designed to protect digital spaces across cloud systems, email, endpoints, and operational technology (OT). Central to its platform are unsupervised ML techniques that build an evolving “pattern of life” for every user and system within an organisation.
In April 2021, the firm listed on the London Stock Exchange with a market value of £2.5 billion, reaching a peak of £7 billion within months, with share value fluctuations which reached a peak of £10.
The Acquisition
Thoma Bravo’s acquisition of Darktrace (the “Acquisition”) was announced in April 2024 and completed in October 2024, following shareholder and court approval, with agreed-upon terms for an all-cash take-private transaction.
The Acquisition occurred during a period of increased scrutiny and share price volatility affecting UK-listed tech and cybersecurity companies. While Darktrace continued to report revenue growth, its valuation may have been constrained by general market trends concerning UK equities’ relative underperformance as well as ongoing investor caution following earlier governance and accounting-related scrutiny. More generally, UK tech firms have tended to trade at a discount relative to US ones. These factors may have contributed to the volatility in Darktrace’s share price and made a take-private transaction attractive by allowing Thoma Bravo to pursue a long-term growth strategy without the pressures of public market scrutiny.
Under the terms of the agreement, Thoma Bravo acquired 100% of Darktrace’s issued share capital for approximately 620 pence per share, valuing the company at around £4.2-4.3 billion. The Acquisition was unanimously recommended by Darktrace’s board and was implemented via a Scheme of Arrangement under the Companies Act 2006. Shareholders approved the scheme in June 2024, and the High Court sanctioned the arrangement in September 2024, allowing the Acquisition to become effective on 1 October 2024, at which point Darktrace was delisted from the London Stock Exchange.
The Acquisition did not give rise to contested litigation or hostile proceedings. Legal scrutiny was mainly concerned with compliance with the UK Takeover Code since Darktace was a UK publicly-listed company. Legal considerations were procedural and regulatory rather than contentious.
Impact
Market reaction to the deal was broadly positive, with the share price rising 18%, signalling the welcoming of a cash offer at a premium in a period marked by valuation pressure for UK tech stocks. By taking Darktrace private, Thoma Bravo enables long-term investment in research and product development without the short-term earnings pressure and disclosure obligations. In terms of UK capital markets, the acquisition raises the issue of UK tech firms opting to exit public markets, which highlights perceptions of valuation discounts relative to US markets.
From a legal perspective, the High Court’s sanctioning of the Scheme of Arrangement adhered closely to established UK corporate law precedents governing public-to-private transactions. The court did not depart from existing precedent, nor was there a cause for introducing heightened scrutiny. This adherence to precedent was appropriate, given that the transaction was recommended by Darktrace’s board and approved by the requisite shareholder majorities.
However, the implementation of the acquisition through a court-sanctioned Scheme of Arrangement, rather than a traditional offer-based and non-court-sanctioned acquisition, is a unique aspect of this transaction. Schemes are used in public company acquisitions because they operate as a statutory compromise between the company and its shareholders, by requiring approval by 75% in value and followed by a High Court sanction. Once approved, the Scheme binds all shareholders, including dissenters. This feature may have been particular to the Acquisition given the need for execution certainty in the public-to-private takeover. Comparatively, an offer-based acquisition would have required Thoma Bravo to achieve a 90% acceptance threshold to acquire the remaining shares, potentially exposing the transaction to hold-out risk. The Court-supervised scheme, therefore, offered a more predictable route to completion.
Overall, the legal outcome reinforces both the reliability and predictability of the UK Scheme of Arrangement mechanism in executing large-scale public takeovers.
Future Outlook
Looking ahead, there may be calls to question public-to-private transactions in the UK. From a legal standpoint, the UK takeover regime functioned smoothly and effectively in this case. Shareholder protections and basic transparency requirements were met, reflecting that the current transactional framework remains fit for purpose.
Assessing Darktrace’s performance following its acquisition is necessarily constrained by the company’s transition to private ownership, which has reduced the availability of publicly disclosed financial data. However, since completion, Darktrace has continued to invest and has pursued acquisitions of complementary cybersecurity technologies, such as its proposed acquisition of Cado Security. While the absence of published revenue and profitability figures limits definitive conclusions as to financial performance, the company’s continued investment activity suggest that private ownership has not impeded on its performance.
However, the rationale for the take-private transaction, namely that private ownership would allow Darktrace to pursue long-term innovation outside the constraints of public markets, highlights a broader market-based issue. Future legal debate is therefore unlikely to centre on reforming the mechanism of Schemes of Arrangement, since it remained useful in this Acquisition, but rather toward the adjacent regulatory environment, such as UK public interest in advanced technologies.
It may be argued that repeated take-privates of UK tech firms risks hollowing out domestic public markets and transferring ownership of important assets to private or overseas investors without meaningful public-interest scrutiny. Supporters of the current system, by contrast, may caution that introducing expansive public-interest review into takeover law could undermine legal decision-making, deter investment, and politicise corporate transactions. While legally uncontroversial, the Acquisition raises wider policy questions in these areas.
Again, it may underscore the disconnect between takeover law and sector-specific features of the tech industry. Takeover law is by default sector-agnostic, treating tech firms in the same manner as other companies. Yet tech businesses are often characterised by long development cycles, intangible assets, and other externalities that public markets may struggle to price accurately. Therefore, takeover law may not be as effective in dealing with the economic characteristics of the tech sector.
Therefore, the Darktrace Acquisition may signal that while takeover law remains effective, it may be disconnected from tech-sector issues, that is UK capital markets, potentially highlighting the need for policy-level reform rather than judicial reform.
References
https://en.wikipedia.org/wiki/Darktrace
https://www.reuters.com/markets/deals/thoma-bravo-buy-uks-darktrace-about-532-billion-2024-04-26/
https://www.londonstockexchange.com/news-article/DARK/court-sanction-of-scheme/16681405
https://www.thomabravo.com/about-us