Sophos acquired for $3.9B | Hacker News Reader

Sophos acquired for $3.9B

itbrief.com.au

163 pointstechnion51 comments

Sophos is the company I use to buy cycling socks, I think I should stock up before they close the store https://shop.sophos.com/collections/itsocks

Heh, I didn't realize they sold those. I got some a couple years ago as a freebie, not sure it was worth the amount of sophos marketing crap I got for the next year or so after I gave them my contact info.

I have multiple legit emails for that exact reason. We had a competition to see who could get the most marketing rubbish at a university fair (this method meant I won, and also noticed an inverse correlation between academic prestige and marketing spending) and I never stopped.

They did a great job on this stuff.

Haha these are all amazing, definitely picking up some before they inevitably close it down. How is it possible that a security company makes better socks than many clothing companies? I mean, come on, you don't even have to be a huge tech nerd to appreciate Mr Miyagi's "Socks On Socks Off"

I'm torn between "they're funny/cute" and "they're so lame" :-)

shame the $3.9 billion wasn't an all-sock transaction

Deis socks used to be the best socks that I owned https://twitter.com/opendeis/status/841794642521739264?lang=...

Great stuff and USPS shipping is free to Europe (DHL is $114.91).

Deis is the name that I haven't heard for very long time

How long are they, I've been looking for some funny socks for fencing recently?

they're crew socks

Bought by Thoma Bravo. Fits the pattern. You would think they would be trying to mash up some these companies to corner the SMB security market but they seem to keep all their companies distinct.

A few household names on the acquisition list.

https://en.wikipedia.org/wiki/Thoma_Bravo#Transactions

Like mashing up Sophos and McAfee? Can you imagine the mess?

No doubt there will be some downsizing before they get mashed up.

McAfee used to be something in the 1990s, now it is bloatware.

Don’t think about McAfee as Provider of only consumer stuff...

Yeah, they provide enterprise-grade bloatware too.

I am still (proudly) using the McAfee Antivirus Enterprise edition on my Win Pro machine. It has (imho) the best options/flexibility. I also remember that the respective firewall was also super strong and very versatile but I can't get my hands on any latest version of it (I have the AV legally).

My understanding is that Windows Defender is the only decent engine nowadays, but that's second-hand anecdata I can't measure the bias of (I don't currently use Windows).

Windows Defender ATP is also on linux: https://docs.microsoft.com/en-us/windows/security/threat-pro...

Ahahaha Microsoft had to catch up to https://github.com/taviso/loadlibrary

Nice!

Or perhaps zero mess, and this is just a good way to acquire all the patents and later they can merge either the companies or the teams behind them to produce what TB envisions. Tha scarier name I saw in their companies' list is BlueCoat. That is some nasty (good nasty) stuff.

URL: https://www.thomabravo.com/companies

EXITED

2015

yeah Symantec and Bluecoat merged.

That’s an impressive collection of many popular household and enterprise brands. Never heard about Thomas Bravo before.

I wonder if this was the suitor for HIBP who had their circumstances change?

This was my first thought as well.

Link to Sophos release: https://www.sophos.com/en-us/press-office/press-releases/201...

(I was getting connection timeout errors on the linked article from the post)

Good move ...and the consolidations continue...

I notice that the power of these new behemoths are a risk to SMEs. Kaseya/Datto/ITGlue/CWM/Automate/Sophos/BG/Sell... These all used to be of a size that could communicate and deal with small business. Far more focus weighted towards enterprise now.

Sophos still stays squarely in the security space at least, I wouldn’t exactly call them a behemoth.

Now Cisco on the other hand, god damned they have their mitts in everything and most of it’s trash. But nobody got fired for buying Cisco, yet.

Napkin math:

So 3.9b / 600m Revenue = 6.5years horizon to breakeven.

Assuming no growth plan, they can hollow out the operating costs by cutting staff by 1/4, and offshoring another 1/4. Guessing here, but their aim is a total return of +%30-%50 (~$2bn)over 10 years with relatively low risk vs. indexes or VC plays.

It works, but it's like putting a company into a digester.

Is that 600m revenue or profit?

yea dividing by revenue to calculate breakeven is just... not even worthy of the HN School of Business

Multiples of revenue is a common valuation number that can imply the length of time an investor will expect they will be able to profit from it.

At 66m/y in profit, that's under %2 annual return on their $4bn investment. To strip and flip the company on a 6-7 year timeframe would make sense. They'll probably need a technical CTO advising them on what's essential and what's not.

However, take us to school. The opportunity to add value is clear.

I think Sophos has just a touch more to it than that. They have a great deal of product and technology and tens of thousands of customers. TB will be interested in growth here by aligning Sophos with its other security assets. I think Sophos is the jewel in the crown frankly. McAfee was the sausage.

If that's the case, the challenge will be retaining the key people responsible for Sophos's 'intellectual capital' and sales relationships. It can be extremely costly to keep people after a PE acquisition in cyber - combination of removing the equity incentives (e.g. stock will eventually vest for the top people, if it hasn’t already) plus being in a very hot market where poaching talent is common plus general erosion in conditions to service the debt from the LBO.

The cynic in me thinks TB knows cybersecurity will sell at even more ludicrous multiples in the future (and they’re swimming in dry powder), so they won’t need to care too much about the underlying health of the business. The optimist thinks that TB are the masters of this niche and see synergies I don’t.

Source: I’ve done DDs in this space and our firm’s (public) stance is to encourage organic growth over doing deals

Anyone in this space can explain this acquisition? What's the end game here?

Thoma Bravo has been acquiring companies in the infosec space. I’m assuming they’re trying to build a portfolio and maybe consolidate at some point.

To add more specificity they now own Barracuda, Centrify, ConnectWise, idaptiv, imperva, imprivata, LogRythm, McAfee, solarwinds, Sophos, and Veracode in the "Current Investments" and "Security" sector defined on their own search filter[1].

[1] https://www.thomabravo.com/companies

SolarWinds was private 2015-2018 but went public again in 2018.

Ahh I see! Interesting!

To build a coalition against the open source alternatives.

A reminder that whenever any cybersecurity-related company gets acquired, any trust you have on them ought to be reset.

How many people laid off? Thoma Bravo is notorious for being extremely spreadsheet-driven and lays off.

I feel bad for the employees.

How difficult would it have been to include "[...] by Thoma Bravo" in the headline?

I wonder what grand plan Thoma Bravo has, they are on a shopping spree on Network Security companies(Imperva,Barracuda,Sophos,Mcacfee...)

Probably as simple as reducing expenses, laying off people, restructuring and spinning the Frankenstein result in an IPO years later.

I hope this doesn't end the plan to open source https://sandboxie.com after Sophos acquired Invencia.

One hopes that they'll use the money to release a Mac version that isn't terrible.

Thoma Bravo is really cleaning up lately.

"Cleaning up" is a phrase reserved for exits. Thoma Bravo is merely "acquisitive". They just raised a big new fund; it is common to have a couple of transactions lined up when raising a new fund so you can begin with a bang and deploy capital sooner rather than later.

True but they know how to maximize the spreadsheets. Expect to see some large returns for Thoma Bravo in the next few years.

The investors will do real good -- from the investor perspective, they are great. Just sucks for the workers that get churned out in the process.

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