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Apax Partners buys stake in security company Sophos for $400M

Oxford head quartered Sophos is No. 3 in the security and data protection suite software business, behind only Symantec and McAfee. Sophos reported 19 percent annual revenue growth in the past three years and it reported $260 million in revenues in the fiscal year ended March 31.

Private equity firm Apax Partners is buying a 70 percent stake in security firm Sophos for more than $400 million plus debt assumption. The deal values Sophos at $830 million.

“Over the past three years, Sophos has prospered operationally and financially, growing our revenues at a 27% cumulative annual growth rate and generating strong cash flow,” said Steve Munford, CEO of Sophos. “As the market continues its migration from point solution to tailored, unified security suites, Sophos’s strategy to offer the world’s most resilient, cost effective solutions without any additional complexity remains key. Apax’s financial backing, combined with Sophos’s deep understanding of security and data protection is great news for our customers, prospects, partners. It is also a testament to the efforts of all those who helped bring Sophos to where it is today.”

“We are delighted to have the opportunity to back Sophos as well as its excellent CEO and management team,” said Salim Nathoo, a partner in the Tech & Telecom team at Apax Partners. “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. Apax’s strong track record and industry specific knowledge in the technology sector makes Sophos a perfect fit, and we look forward to working closely with this high-growth business going forward.”