Apax and Sophos Have a Deal

IT and data security firm Sophos will be sold to Apax Partners in a $830 million deal.

Sophos, based in the UK, is a global IT security and data protection form offering a variety of protective solutions for technology. For its fiscal year ending March 31, 2010, Sophos had revenue excess of $260 million, up 22 percent. The firm has more than 100 million users and counts Harvard University and Cisco among its clients.

Some shareholders will maintain their stakes, including Jan Hruska and Peter Lammer, who co-founded the company in 1985. TA Associates, a minority shareholder, will sell its stake to Apax.

"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,” said Salim Nathoo, a partner in the Tech & Telecom team at Apax Partners. “Sophos is a very strong platform and is gaining market share.”

Other Apax investments in the tech and telecom space include overseas plays in Bezeq and Versatel Deutschland Gmbh and Crescendo Networks in Israel.

Private equity firms have increasingly sought to get into the technology solutions space in recent months.

In March, Stepstone ASA announced plans to sell its Stepstone Solutions talent management software division to European private equity firm HgCapital for about €110 million. Additionally, Harbour Group, a St. Louis-based private equity firm, bought in March Fleetgistics Holdings from Atlantic Street Capital, which made two buys to support its platform in the time it owned the company. ANXeBusiness Bought S2S Communications in February and Calera Capital took a stake in Rock-It Cargo, a stage equipment management logistics firm, earlier this year.

Last year, Aquiline Capital Partners led a €50 million investment in Clear2Pay NV, a financial services technology firm, that will set the company—already known for developing via M&A—on an acquisition spree. The payment processing space—already highly dependent on technological security—is expected to continue to undergo a wave of consolidation in coming months.