News
Sophos to launch €217 million offer for shares in Utimaco Safeware AG
July 2008 by Marc Jacob
Sophos announced its intent to acquire Utimaco Safeware AG (“Utimaco”) a global in data security solutions for enterprises, headquartered in Oberursel, near Frankfurt a.M., Germany. Sophos intends to launch a voluntary public takeover offer in cash for all outstanding Utimaco shares. Concurrently, Sophos has entered into an agreement with Investcorp Technology Partners, the largest shareholder of Utimaco, to acquire its 24.99% stake in Utimaco for cash and Sophos stock upon the takeover offer becoming unconditional.
This intended combination furthers Sophos’s Security and Control strategy – to lead in protecting information and computers from external threats and careless or malicious end-user behaviour – at a time when data loss has joined viruses as a key concern for IT professionals. Upon completion, Utimaco will become a new business unit within the Sophos group focused on data security, while retaining its well-established, SafeGuard product branding under the Sophos brand.
Sophos intends to make a cash offer at EUR 14.75 per Utimaco share and a total implied equity purchase price of EUR 217 million
The intended offer represents a premium of 92%, 76% and 61% on Utimaco’s latest closing price, the averages of the last 30 trading day and the last 90 trading day prices, respectively[1]
Sophos has signed an agreement with Investcorp Technology Partners for the acquisition of its 24.99% stake in Utimaco
The acceptance period is expected to start in August 2008
Sophos anticipates completing the offer in October 2008
Independent of the offer, Sophos has entered into a reseller contract with Utimaco to supply SafeGuard Enterprise worldwide
Utimaco enables organizations to safeguard against intentional or unintentional loss of sensitive or confidential data by providing a complete range of data security solutions for data at rest, data in motion and data in use, based around strong encryption and central security policy management. Industry analyst IDC forecasts the Information Protection and Control market to grow at CAGR 33.4% between 2006 and 2011.
”Information security should be as commonplace as anti-virus protection - no longer a nice to have, but a must have. Companies of all sizes are looking to protect against both external and internal threats, with one manageable solution," said Steve Munford, CEO of Sophos. "Integrating endpoint protection, network access control and encryption provides us with a great platform for innovation as the market continues to focus on securing and controlling information."
Mr. Munford continues, “Utimaco has great engineering and their new SafeGuard Enterprise product perfectly addresses the need for sophisticated key management and modular architecture. There is a strong fit with both organizations excelling in engineering and customer service, and we will continue to prioritize investment in these areas.“
After strategic discussions, and independently from the intended offer, Sophos and Utimaco have entered into a reseller contract regarding SafeGuard Enterprise and a mutual referral agreement for all products of both companies, in order to take advantage of market synergies quickly.
Customers of both companies can look forward to the benefits of the combined experience and expertise, leading to more comprehensive and manageable solutions from a strong IT security vendor. As a business unit within the Sophos group, Utimaco’s products will receive continued strong support, development and investment.
Offer Details
Sophos intends to launch a takeover offer in cash for all outstanding Utimaco shares at the price of EUR 14.75 per share. This price represents:
A 92% premium on the latest closing price of EUR 7.68
A 76% premium on the average of the last 30 trading day price of EUR 8.38
A 61% premium on the average of the last 90 trading day price of EUR 9.16
A total implied equity purchase price of EUR 217 million
Concurrently, Sophos has entered into an agreement with Investcorp Technology Partners, Utimaco’s largest shareholder, in which Investcorp Technology Partners has agreed not to tender its 24.99% stake in Utimaco during the offer period and has agreed to sell this stake for cash and Sophos stock upon the takeover offer becoming unconditional.
It is intended that the offer will be subject to an offer acceptance level of at least 50.5% of the issued share capital of Utimaco, as well as other customary conditions.
The transaction will be financed through Sophos’ existing cash, new debt facilities and equity. Sophos has secured fully committed financing from HSBC and RBS as well as TA Associates, a leading technology focused private equity firm and an existing Sophos shareholder. Deutsche Bank Securities Inc. is acting as financial advisor to Sophos in this transaction.
Timetable
In accordance with German takeover rules, Sophos has published a statutory announcement of a voluntary public takeover offer and intends to issue the offer document describing the details of the offer to Utimaco’s shareholders, following approval by the German regulator Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). Sophos anticipates completing the offer in October.
