Sophos Group (SOPH)

 

Third time lucky for £1bn Sophos

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Third time lucky for £1bn Sophos
With its shares priced at 225p, Sophos (SOPH) was worth over £1 billion when it IPO'ed on the London Stock Exchange Friday, more than bosses originally expected. And it's third time lucky for the antivirus and encryption products whizz, which has discussed an IPO twice before. A surge in the share price of as much as 7% is the icing on the cake.

The float raised around $125 million to help cut debt from $319 million and grow the business. Founders, staff and private equity firm Apax Partners are quids in, too. They've pocketed £272.6 million from the sale and could make a further £52.8 million through an overallotment option.

Apax now owns 40% of the company, the founders just under 19%, Investcorp holds a 2.5% stake and the group's directors 1.7%.

"Today marks a significant milestone for all of us at Sophos," said chief executive Kris Hagerman. "We are proud to be part of Britain's growing tech economy as a listed business and a leading global provider in the cyber security sector."

This is the third time the company, which hopes to be eligible for the FTSE UK Index Series in September, has flirted with a stockmarket flotation. The financial crisis bombed the first attempt and in 2010 co-founders Jan Hruska and Peter Lammer opted instead to offload a stake to Apax, valuing the company at $830 million.

We knew Sophos, which sells anti-virus, anti-spyware and client firewall products, would be worth more this time round; billings are up 44% since 2010, sales has jumped three quarters to $447 million and unlevered cash flow of $65.3 million is up a fifth. With host intrusion prevention and disk encryption products also in its armoury, the group is tapping into a market that was worth $18 billion last year.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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