Apax Partners Funds to acquire majority interest in Sophos plc

Apax Partners Funds to acquire majority interest in Sophos plc

4 May 2010

London, 4 May 2010 – Sophos plc and funds advised by Apax Partners today announced that they have signed a definitive agreement in which Apax Funds will purchase a majority stake in Sophos plc (“Sophos”), a leading IT security and data protection provider, from the founders of Sophos and TA Associates, valuing the company at US$830million. The founders of Sophos will retain a significant minority shareholding.

Sophos is a leading vendor in the endpoint segment of the IT security market and protects client devices (primarily PCs) and servers. Sophos provides anti-malware to protect against viruses and spyware; threat management including endpoint firewall, host intrusion detection and prevention; network access control; encryption and data leak prevention. The company has 100 million users in more than 150 countries, including Cisco, Marks & Spencer, Heinz and Harvard University. In its fiscal year ended March 31, 2010 (unaudited), Sophos had billings in excess of $330 million (compared with $273 million in FY 2009), revenue in excess of $260 million (FY2009: $213 million) and generated unlevered free cash flow of approximately $55 million (FY2009: $40 million).

Roy Mackenzie, a partner in the Tech and Telecom team at Apax Partners, commented: “We are delighted to have the opportunity to back Sophos and its management team as they build a global security market leader. We have been impressed with Sophos’s rapid growth and strong market position and look forward to working with the management team to take the business forward to the next phase of growth”.

Salim Nathoo, co-head of Apax Partners Tech and Telecom team commented, “We identified the security software space as an attractive investment area for us given its secular growth driven by ever increasing malware threats and high barriers to entry. Sophos is a very strong platform and is gaining market share. Apax’s strong track record and industry specific knowledge in the technology sector makes Sophos a perfect fit for us.”

Steve Munford, CEO of Sophos, commented: “It is very exciting to have Apax on board as we embark on the next stage of growth. Security challenges from both external and internal threats continue to grow rapidly. In response, the market is changing from point antivirus to broad suites which provide better protection. Sophos is at the forefront of this trend and its products offer a broad range of functions to tackle security threats which have broadened and increased in volume. Technology security is of utmost importance and upgrading and updating software regularly to provide effective protection against threats is a key annual IT investment for businesses. Together with Apax, I am confident that Sophos will be able to continue its already strong growth.”

Technology & telecoms is one of the five sectors on which Apax Partners focuses exclusively. Notable current and historic investments in the sector include Promethean World, a leader in the rapidly growing global market for interactive learning technology; SMART Technologies Inc, a Canadian provider of interactive collaboration products; TDC A/S, the pan-European telecoms business headquartered in Denmark; Weather Investments, an international telecommunications business; and Inmarsat and Intelsat, which are both global satellite operators.

About Apax Partners

Apax Partners is one of the world’s leading private equity investment groups. It operates across the United States, Europe and Asia and has more than 30 years of investing experience. Funds under the advice and management of Apax Partners globally total approximately $40 billion.

These Funds provide long-term equity financing to build and strengthen world-class companies. Apax Partners Funds invest in companies across its global sectors of Retail & Consumer, Tech & Telecom, Media, Healthcare and Financial & Business Services. For more information visit: www.apax.com

About Sophos

More than 100 million users in 150 countries rely on Sophos as the best protection against complex threats and data loss. Sophos is committed to providing security and data protection solutions that are simple to manage, deploy and use and that deliver the industry's lowest total cost of ownership. Sophos offers award-winning encryption, endpoint security, web, email, and network access control solutions backed by SophosLabs - a global network of threat intelligence centers. With more than two decades of experience, Sophos is regarded as a leader in security and data protection by top analyst firms and has received many industry awards.

Sophos is headquartered in Boston, US and Oxford, UK. More information is available at www.sophos.com.

For further information, please contact:
Ben Harding
Tel: +44 (0)20 7872 6401
Email: ben.harding@apax.com

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