So, today we were informed that Sophos has priced its stock on the London Stock Exchange.
“Following the announcement by Sophos Group plc on 3 June 2015 of its intention to proceed with an initial public offering, the company today announces the successful pricing of the offer at 225p per share. Based on the offer price, the market capitalisation of the company will be £1,013m at the commencement of conditional dealings.”
There are about 450m of shares outstanding, 34.8% of which have been tendered — or about 156m.
Based on the company’s 2014 results, the equity of Sophos is valued at about 3.6x trailing revenues and 14x adjusted operating cash flow — trading multiples that seem a tad rich, to be honest, also because they will likely rise based on the forward enterprise value of Sophos.
On the face of it, this is certainly a good deal for the sellers.
“The selling shareholders (comprising Apax US VII, LP, Apax Europe VII-A, LP, Apax Europe VII-B, LP, Apax Europe VII-1, LP, Apax Europe VI-A, LP and Apax Europe VI-I, LP (the “Apax Funds”), ITPU Holdings Limited (“Investcorp”), the group’s founders, the directors, certain members of the group’s management and other investors) will receive gross proceeds of approximately £272.6m pursuant to the offer.”
Following the deal, Apax funds will hold a 40.1% stake, while the founders will hold 18.9% of the shares, followed by Investcorp (2.5%) and the directors (1.7%).
Thumbs up for now — but the next round may be more challenging.