Sophos Group Regulatory News (SOPH)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION

FOR IMMEDIATE RELEASE

16 October 2019

Disclosure under Rule 2.10(a) of the Takeover Code in respect of the

RECOMMENDED CASH ACQUISITION

for

SOPHOS GROUP PLC

by

SURF BUYER LIMITED

(a newly formed company owned by funds managed and/or advised by Thoma Bravo, LLC)

Increase in irrevocable undertakings

Further to the announcement made on 14 October 2019 pursuant to Rule 2.7 of the Takeover Code relating to the recommended offer for the entire issued and to be issued share capital of Sophos Group Plc ("Sophos") by Surf Buyer Limited ("Bidco") (the "Acquisition"), to be implemented by way of a court sanctioned scheme of arrangement under the Companies Act 2006 (the "Scheme") (the "Announcement"), Bidco is pleased to confirm that it has now received an irrevocable undertaking from LGL Trustees Limited in its capacity as trustee of The Hruska 2015 Settlement (as referred to in the irrevocable undertaking) to:

(i) vote in favour of all resolutions to approve the Scheme and any related matters, proposed at any general or class meeting and Court-convened meeting of Sophos to be convened and held in connection with the Scheme; and

(ii) if the Acquisition is implemented by way of an Offer, agree to accept the Offer in accordance with the terms of its undertaking,

with respect to, its aggregate holding of 5,458,132 Sophos Shares, representing approximately 1.1% of Sophos' total issued ordinary share capital as at 11 October 2019 (being the last Business Day before the date of the Announcement) (the "Trustee Irrevocable Undertaking").

The Trustee Irrevocable Undertaking is being given on substantially the same terms as the irrevocable undertakings given by Jan Hruska and Peter Lammer dated 14 October 2019 in connection with the Announcement. Further details regarding the Trustee Irrevocable Undertaking are set out in the appendix to this announcement.

In addition, Bidco has received an irrevocable undertaking from the Pentagon Lock Entities (which are owned by funds advised by Apax Partners LLP) which supersedes their irrevocable undertaking dated 14 October 2019 given in connection with the Announcement (the "Original PL Irrevocable Undertaking") such that the updated irrevocable undertaking to vote in favour of the resolutions relating to the Acquisition at the Meetings, or in the event that the Acquisition is implemented by an Offer, to accept or procure acceptance of such Offer, applies to an additional 40,000 Sophos Shares beneficially held by Pentagon Lock 6-A S.à.r.l. (the "Updated PL Irrevocable Undertaking"). As a result, Bidco has procured an irrevocable commitment in respect of the Pentagon Lock Entities' aggregate beneficial holding of 49,565,682 Sophos Shares. All terms of the Updated PL Irrevocable Undertaking remain the same as the Original PL Irrevocable Undertaking.

As a result of the Trustee Irrevocable Undertaking and Updated PL Irrevocable Undertaking received by Bidco, the total number of Sophos Shares in respect of which Bidco has received irrevocable undertakings has increased by 5,498,132 to a total number of 138,478,108 which represents approximately 28.4% of the existing ordinary share capital of Sophos as at 11 October 2019 (being the last Business Day before the date of the Announcement).

A copy of the Trustee Irrevocable Undertaking and the Updated PL Irrevocable Undertaking will be made available on Sophos' website at https://investors.sophos.com.

Unless otherwise defined in this announcement, capitalised words and phrases used in this announcement shall have the same meanings given to them in the Announcement.

ENQUIRIES:

FURTHER INFORMATION

Goldman Sachs International, which is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom, and Goldman Sachs & Co. LLC (together, "Goldman Sachs") are acting exclusively for Bidco and Thoma Bravo as financial advisers and no one else in connection with the Acquisition and other matters set out in this announcement and will not be responsible to anyone other than Bidco and Thoma Bravo for providing the protections afforded to clients of Goldman Sachs, nor for providing advice in connection with the Acquisition, the content of this announcement or any matter referred to herein. Neither Goldman Sachs nor any of Goldman Sachs' subsidiaries, affiliates or branches owes or accepts any duty, liability or responsibility whatsoever (whether direct, indirect, consequential, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Goldman Sachs in connection with this announcement, any statement contained herein or otherwise.

J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the PRA and regulated by the PRA and the FCA. J.P. Morgan Cazenove is acting as financial adviser exclusively for Sophos and no one else in connection with the Acquisition and will not regard any other person as its client in relation to the Acquisition and will not be responsible to anyone other than Sophos for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to any matter referred to herein.

Lazard & Co., Limited ("Lazard"), which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively as financial adviser to Sophos and no one else in connection with the Acquisition and will not be responsible to anyone other than Sophos for providing the protections afforded to clients of Lazard nor for providing advice in connection with the Acquisition or any other matter referred to herein. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with the Acquisition, any statement contained herein or otherwise.

UBS AG London Branch ("UBS") is authorised and regulated by the Financial Market Supervisory Authority in Switzerland. It is authorised by the PRA and subject to regulation by the FCA and limited regulation by the PRA in the United Kingdom. UBS is acting exclusively as financial adviser to Sophos and no one else for the purpose of the Acquisition and will not be responsible to anyone other than Sophos for providing the protections offered to clients of UBS nor for providing advice in relation to the Acquisition or any transaction, arrangement or other matter referred to herein.

In accordance with the Takeover Code, Goldman Sachs International, J.P. Morgan Cazenove and UBS and their respective affiliates will continue to act as exempt principal trader in Sophos securities on the London Stock Exchange. These purchases and activities by exempt principal traders which are required to be made public in the United Kingdom pursuant to the Takeover Code will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com. This information will also be publicly disclosed in the United States to the extent that such information is made public in the United Kingdom.

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made solely pursuant to the terms of the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document), which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Acquisition. Any decision in respect of, or other response to, the Acquisition should be made only on the basis of the information in the Scheme Document (or, if the Acquisition is implemented by way of an Offer, the Offer Document).

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas Shareholders

This announcement has been prepared in accordance with English law, the Takeover Code, the Market Abuse Regulation and the Disclosure Guidance and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

The availability of the Acquisition to Sophos Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Sophos Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Copies of this announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition. If the Acquisition is implemented by way of an Offer (unless otherwise permitted by applicable law and regulation), the Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

Notice to US investors in Sophos

The Acquisition relates to the shares of an English company and is being made by means of a scheme of arrangement provided for under English company law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer or proxy solicitation rules under the US Exchange Act of 1934. Accordingly, the Acquisition is subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement which differ from the disclosure requirements of the US tender offer and proxy solicitation rules. The financial information included in this announcement has been prepared in accordance with generally accepted accounting principles of the United Kingdom and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

If, in the future, Bidco exercises its right to implement the Acquisition by way of an Offer, which is to be made into the United States, such Offer will be made in compliance with the applicable US laws and regulations.

It may be difficult for US holders of Sophos Shares to enforce their rights and any claim arising out of the US federal laws, since Bidco and Sophos are located in a non-US jurisdiction, and some or all of their officers and directors may be residents of a non-US jurisdiction. US holders of Sophos Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

US Sophos Shareholders also should be aware that the transaction contemplated herein may have tax consequences in the US and, that such consequences, if any, are not described herein. US Sophos Shareholders are urged to consult with legal, tax and financial advisers in connection with making a decision regarding this transaction.

Forward Looking Statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by Bidco and Sophos contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Bidco and Sophos about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.

The forward-looking statements contained in this announcement include statements relating to the expected effects of the Acquisition on Bidco and Sophos (including their future prospects, developments and strategies), the expected timing and scope of the Acquisition and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "projects", "strategy", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved (or, in each case, their negative or other variations). Although Bidco and Sophos believe that the expectations reflected in such forward-looking statements are reasonable, Bidco and Sophos can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements.

These factors include, but are not limited to: the ability to complete the Acquisition; the ability to obtain requisite regulatory and shareholder approvals and the satisfaction of other Conditions on the proposed terms and schedule; as future market conditions, changes in general economic and business conditions, the behaviour of other market participants, the anticipated benefits from the proposed transaction not being realised as a result of changes in general economic and market conditions in the countries in which Bidco and Sophos operate, weak, volatile or illiquid capital and/or credit markets, changes in tax rates, interest rate and currency value fluctuations, the degree of competition in the geographic and business areas in which Bidco and Sophos operate, the consequences in the UK and globally from the withdrawal of the UK from the European Union, and changes in laws or in supervisory expectations or requirements. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Bidco nor Sophos, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place any reliance on these forward-looking statements. Other than in accordance with their legal or regulatory obligations, neither Bidco nor Sophos is under any obligation, and Bidco and Sophos expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Dealing and Opening Position Disclosure Requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an Offeree company or of any securities exchange Offeror (being any Offeror other than an Offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange Offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the Offeree company and (ii) any securities exchange Offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm on the 10th business day following the announcement in which any securities exchange Offeror is first identified. Relevant persons who deal in the relevant securities of the Offeree company or of a securities exchange Offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the Offeree company or of any securities exchange Offeror must make a Dealing Disclosure if the person deals in any relevant securities of the Offeree company or of any securities exchange Offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the Offeree company and (ii) any securities exchange Offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an Offeree company or a securities exchange Offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the Offeree company and by any Offeror and Dealing Disclosures must also be made by the Offeree company, by any Offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the Offeree and Offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any Offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website

This announcement and the documents required to be published pursuant to Rule 26 of the Takeover Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Sophos' website at https://investors.sophos.com promptly and in any event by no later than 12 noon on the Business Day following the date of this announcement.

APPENDIX 1

DETAILS OF IRREVOCABLE UNDERTAKINGS

The irrevocable undertaking given by LGL Trustees Limited is being given on substantially the same terms as the irrevocable undertakings given by Jan Hruska and Peter Lammer, which are described in paragraph 3 of Appendix 3 to the Announcement. The irrevocable undertaking will cease to be binding and be of no effect if and on the earlier of the following events:

1. the offer contained in the Scheme Document sent to Sophos Shareholders being on worse terms than set out in the Announcement (except if otherwise acceptable to LGL Trustees Limited);

2. the Scheme Document not being sent to Sophos Shareholders within 28 days (or such later period as the Panel may agree) after the date of this announcement;

3. Bidco announces, with the consent of the Panel, that it does not intend to make or proceed with the Acquisition and no new, revised or replacement offer or scheme is announced in accordance with Rule 2.7 of the Code at the same time;

4. the Scheme lapsing or being withdrawn in accordance with its terms and Bidco publicly confirming that it does not intend to proceed with the Acquisition or to implement the Acquisition by way of an Offer or otherwise;

5. the Scheme not having become effective by 6.00 p.m. on the Long Stop Date (or such other time and date as agreed between Bidco and Sophos, with the approval of the Court and/or the Panel, if required (other than in circumstances where Bidco has, prior to such date, elected to exercise its right to proceed by way of an Offer and announced the same in accordance with the requirements of Paragraph 8 of Appendix 7 to the Code, and such Offer has not lapsed or been withdrawn));

6. any third party announces, in accordance with the Code, a firm intention to make a general offer (whether made by way of an offer or a scheme of arrangement) for the entire issued share capital of Sophos (not already owned by such third party) (a "Competing Offer") at an offer price that is above $7.955 per Sophos Share (or if the Competing Offer price is in Pounds Sterling, the Pounds Sterling equivalent of $7.955 per Sophos Share based on the spot rate on the date of the firm offer announcement of the Competing Offer); or

7. any Competing Offer is declared wholly unconditional or, if proceeding by way of a scheme of arrangement, becomes effective.

Under the terms of the irrevocable undertaking, LGL Trustees Limited has the ability to sell its Sophos Shares. To the extent that, prior to the shareholder meetings (or before such time as the Offer is being implemented by way of a takeover offer), LGL Trustees Limited sells Sophos Shares representing more than 30% of its holdings of Sophos Shares, any sale above such 30% amount will be subject to the transferee agreeing to an undertaking in substantially the form as that provided by the transferor. After the shareholder meetings (or after such time as the Offer is being implemented by way of a takeover offer), Bidco will have a right of first offer to purchase any Sophos Shares sold by LGL Trustees Limited at the price implied by the Offer.