RE: Darktrace not looking to sell up or sell out24 Aug 2022 12:40
Research and development expenditure is below peers, at 7.5 per cent of revenue in the first half, a figure it expects to rise to between 10 and 13 per cent. Darktrace has pointed to the “self-learning” nature of its cybersecurity software, which cuts down on installation time and costs and means the core technology can be easily adapted.
Investors might look to the takeout premiums achieved by some of Thoma Bravo’s other targets, including software group Sophos at a 37 per cent premium in 2019 and last year’s purchase of US cybersecurity specialist Proofpoint at a 34 per cent premium to the share price.
Yet Darktrace is a less mature business, posting faster recent revenue growth but with a shorter proven record. The downturn in tech valuations in the face of sharply rising inflation could also prove an additional justification for a less meaty takeover premium.
Adding Darktrace to its stable of cybersecurity assets would provide Thoma Bravo with plenty of opportunity to strip out costs, an opportunity that won’t go unnoticed by larger rivals either.
ADVICE Hold
WHY A firm offer could solidify the shares’ recent gains or send them higher still