NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
THAT JURISDICTION
FOR IMMEDIATE
RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
26 APRIL 2024
RECOMMENDED CASH
ACQUISITION
of
Darktrace plc
by
Luke Bidco Limited
(a newly-formed company indirectly
wholly-owned by funds managed and/or advised by Thoma Bravo,
L.P.)
to be implemented by means of a scheme
of arrangement
under Part 26 of the Companies Act
2006
Summary
· The
boards of directors of Luke Bidco Limited ("Bidco") and Darktrace plc
("Darktrace") are pleased
to announce that they have reached agreement on the terms and
conditions of a recommended all cash acquisition by Bidco of the
entire issued, and to be issued, ordinary share capital of
Darktrace. It is intended that the Acquisition will be implemented
by way of a Court-sanctioned scheme of arrangement under Part 26 of
the 2006 Act.
·
Under the terms of the Acquisition, each Darktrace
Shareholder will be entitled to receive:
for each Darktrace Share: $7.75 in
cash
· The
GBP equivalent value of the Acquisition price per Darktrace Share
based on the Announcement Exchange Rate, being 620 pence,
represents a premium of approximately:
o 44.3 per cent.
to the volume-weighted average price of 429.9 pence per Darktrace
Share for the three-month period ended 25 April 2024 (being the
last Business Day before the date of this announcement);
o 20.0 per cent.
to the Closing Price of 517.0 pence per Darktrace Share on 25 April
2024 (being the last Business Day before the date of this
announcement);
o 19.6 per cent.
to the highest closing share price of 518.6
pence per Darktrace Share for the twelve month period
ended 25 April 2024 (being the last Business Day before the
date of this announcement);
o 46.0 per cent.
to the 21 March 2024 secondary placing price of 425.0 pence per
Darktrace Share; and
o 148.1 per cent.
to the IPO price of 250 pence per Darktrace Share on 30 April
2021.
· The
Acquisition values Darktrace's entire issued, and to be issued,
ordinary share capital at approximately $5,315 million on a fully
diluted basis and implies an enterprise value of approximately
$4,992 million (which is equivalent to £4,254 million and £3,995
million respectively based on the Announcement Exchange Rate) and a
multiple of approximately 34 times Darktrace's Adjusted EBITDA for
the twelve months ended 31 December 2023 of $146
million.
·
Bidco will procure that a facility will be made available
under which Scheme Shareholders will be able to elect (subject to
the terms and conditions of the facility) to receive the cash
consideration in Sterling (after deduction of any transaction or
dealing costs associated with the conversion) at the applicable
market exchange rate on the latest practicable date for fixing such
rate prior to the relevant payment date. Further details of this
facility and the election by Scheme Shareholders wishing to receive
their cash consideration in Sterling will be set out in the Scheme
Document and the Form of Election. On the basis of the Announcement
Exchange Rate, the cash consideration implies an equivalent value
of 620 pence per Darktrace Share. For any Scheme Shareholder
electing to be paid their cash consideration in Sterling, the
amount per Darktrace Share received may, depending on the
prevailing exchange rate, result in a payment below or above 620
pence per Darktrace Share.
· If,
on or after the date of this announcement and prior to the
Acquisition becoming Effective, any dividend and/or other
distribution and/or other return of capital or value is announced,
declared, made or paid or becomes payable in respect of the
Darktrace Shares, Bidco reserves the right to reduce the
consideration payable under the terms of the Acquisition for the
Darktrace Shares by an amount up to the aggregate amount of such
dividend and/or distribution and/or other return of capital or
value, in which case any reference in this announcement to the
consideration payable under the terms of the Acquisition will be
deemed to be a reference to the consideration as so reduced. Any
exercise by Bidco of its rights referred to in this paragraph shall
be the subject of an announcement and, for the avoidance of doubt,
shall not be regarded as constituting any revision or variation of
the terms of the Scheme or the Acquisition. In such circumstances,
Darktrace Shareholders would be entitled to retain any such
dividend, distribution and/or other return of capital or
value.
· Thoma
Bravo, L.P. ("Thoma Bravo")
firmly believes that the Acquisition will benefit Darktrace,
Darktrace's customers and the wider technology ecosystem through
supporting the development of enhanced products and Darktrace's
cybersecurity capability. Bidco has agreed with Darktrace under the
terms of the Cooperation Agreement that Thoma Bravo will, with
Darktrace's support and involvement, engage proactively and
collaboratively with the competent regulatory authorities and
government stakeholders, recognising the specific importance of
Darktrace's contribution to the technology ecosystem.
Recommendation
· The
Darktrace Directors, who have been so advised by Jefferies
and Qatalyst Partners as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and
reasonable. In providing their advice, Jefferies and
Qatalyst Partners have taken into account the commercial
assessments of the Darktrace Directors. Jefferies and
Qatalyst Partners are providing independent financial advice
to the Darktrace Directors for the purposes of Rule 3 of the
Takeover Code.
·
Accordingly, the Darktrace Directors intend to recommend
unanimously that the Darktrace Shareholders vote, or procure
voting, in favour of the Scheme at the Court Meeting and the
Resolutions at the General Meeting (or in the event that the
Acquisition is implemented by an Offer, to accept or procure
acceptance of such Offer), as the Darktrace Directors who hold
interests in Darktrace Shares (in a personal capacity or through a
nominee) have irrevocably undertaken to do, or to procure to be
done, in respect of their own beneficial holdings (or those
Darktrace Shares over which they have control), being, in aggregate
6,132,989 Darktrace Shares (representing approximately 0.88 per
cent. of the existing issued ordinary share capital of Darktrace)
as at 25 April 2024, being the Business Day prior to the date of
this announcement. Further details of these undertakings, including
the circumstances in which they cease to be binding, are set out
in Appendix 3 to this
announcement.
Background to and reasons for the
Acquisition
·
Thoma Bravo believes that the acquisition of Darktrace
represents an attractive opportunity to increase its exposure to
the large and growing cybersecurity market, and to invest to
accelerate Darktrace's continued development and further scale the
business globally.
· Darktrace
is a global leader in cybersecurity artificial intelligence. Thoma
Bravo recognises that Darktrace is a pioneer in using self-learning
artificial intelligence to neutralise cyber threats and automate
responses to cyber incidents, leveraging its long-standing research
and development expertise. Rather than study historic attacks,
Darktrace's technology continuously learns and updates its
knowledge of an organisation's business data and applies that
understanding to help transform security operations to a state of
proactive cyber resilience. As a result, Darktrace has become a
leader in cybersecurity artificial intelligence now providing a
full lifecycle approach to cybersecurity enabling its 9,400
customers to identify, stop and respond to all known and unknown
threats, across all aspects of an organisation's cybersecurity
tools. Thoma Bravo recognises the strength of Darktrace's ActiveAI
Security Platform, the expertise of its Cambridge-based technology
team, the track record of its experienced management team, and the
compelling nature of its resilient financial model.
· The
cybersecurity market is evolving at pace and the volume and
sophistication of cyber threats and attacks faced is rapidly
increasing. However, the market remains fragmented, with few truly
global players. Serving the world's largest customers and
enterprises requires Darktrace to continually make significant
technology investments and further scale globally, to ensure that
its platform can stay ahead of changing cyber threats.
· Thoma
Bravo believes that private ownership can facilitate its
development. Thoma Bravo has a long track record of providing
capital and strategic support to experienced management teams,
growing software and technology companies, and creating highly
skilled jobs. A partnership with Thoma Bravo would give Darktrace a
unique opportunity to accelerate Darktrace's growth and the
development of AI augmented cyber solutions for its customers and
grow over time; in particular, through:
o continuing
Darktrace's strong organic growth momentum, with help from Thoma
Bravo's deep experience of growing enterprise software businesses
as well as through opportunities and learnings from its large
software portfolio;
o utilising Thoma
Bravo's M&A expertise to grow the Darktrace platform in the
highly fragmented cybersecurity market; and
o leveraging
Thoma Bravo's proprietary operational best practices built over the
course of 40 years of experience to further build a best-in-class
software franchise.
Background to and reasons for the
recommendation
· Since its
inception in 2013, Darktrace has rapidly grown to become a
successful global leader in cybersecurity artificial intelligence,
currently employing over 2,300 people around the world and
protecting over 9,400 customers globally from advanced cyber
threats. Rather than study historic attacks, Darktrace's technology
continuously learns and updates its knowledge of an organisation's
business data and applies that understanding to help transform
security operations to a state of proactive cyber resilience. The
Darktrace ActiveAI Security Platform™ provides a full lifecycle
approach to cyber resilience that can autonomously spot and respond
to known and unknown in progress threats within seconds across the
entire organisation, including cloud, apps, email, endpoint,
network and operational technology.
· In 2021,
Darktrace successfully listed on the London Stock Exchange, raising
capital to support its future growth, including investments in
research and development and product innovation to address the
growing threat of cyber disruption, the hiring of senior leaders
with deep functional expertise who in turn have evolved the
business for its next phase of growth, particularly across its
Go-To-Market function alongside investments in the systems, tools
and processes needed to support a rapidly growing business. The
business saw a temporary impact of these changes in the first
quarter of the 2024 fiscal year and now these investments are
substantially paying off with Darktrace reporting a strong
financial performance in its recent first half results and third
quarter trading update.
· Whilst
the Darktrace Board remain confident that Darktrace's strategy can
continue to deliver attractive returns for shareholders and that
Darktrace has a strong future as a public company, the Darktrace
Board believes that Darktrace's operating and financial
achievements have not been reflected commensurately in its
valuation with shares trading at a significant discount to its
global peer group. The Darktrace Board recognises that there are
risks to, as well as uncertainty as to the timing and delivery of,
shareholder returns on the public market and the Acquisition
provides an opportunity for Darktrace Shareholders to receive the
certainty of cash consideration at a fair value for their shares at
this time in Darktrace's evolution.
· Through
its partnership with Thoma Bravo, Darktrace will be further enabled
to deliver on its strategy in a stable and private setting, to
create efficiently developed cybersecurity products, leverage
differentiated technology to drive product adoption and sales
growth, and hire and retain talent to drive innovation and business
success.
· Darktrace
is a proud contributor to the British technology, AI and cyber
security ecosystem, having substantially gained from the strong
academic heritage of machine learning in the UK and the world-class
British intelligence community. In addition to the financial terms
of the Acquisition, in its evaluation of Thoma Bravo as a suitable
owner of Darktrace from the perspective of all stakeholders, the
Darktrace Board have also taken into account Thoma Bravo's
intentions for the business, including its employees, customers,
suppliers and business partners and is encouraged that Thoma Bravo
intends to support the management team as they continue to grow
Darktrace as an independent business, headquartered in the UK.
o This includes
Thoma Bravo's intentions that employees are appropriately
incentivised to support the long-term growth of the business, that
Darktrace retains its research and development capabilities in the
UK and the Netherlands, and that there will be no material
restructurings or changes to Darktrace's Cambridge, UK
headquarters, or other business operations.
o Darktrace
continues to be a British tech champion operating at the forefront
of AI to solve the problem of cyber security in the UK and around
the world and will continue to engage constructively with its
stakeholders, including government, to contribute to AI and cyber
security resilience.
o Darktrace will
continue to create high skilled jobs in the UK and invest in
building world-class cyber AI capabilities to improve UK
resilience. Being able to draw on Thoma Bravo's resources
and expertise will support Darktrace's continued growth globally,
resulting in further opportunities for its people.
· Having
carefully considered the Acquisition in accordance with its
fiduciary duties the Darktrace Board believes that the terms of the
Acquisition, including the price, are such that shareholders should
be provided with the opportunity to consider them. The Darktrace
Board notes that it has previously reviewed and rejected
unsolicited proposed offers from Thoma Bravo on the basis that they
did not fairly represent the value of the Darktrace business. The
Darktrace Board's recommendation takes into consideration that:
o the Acquisition is
priced at a premium based on the Announcement Exchange Rate
of approximately:
·
44.3 per cent. to the volume-weighted average price of 429.9
pence per Darktrace Share for the three-month period ended 25 April
2024 (being the last Business Day before the date of this
announcement);
·
20.0 per cent. to the Closing Price of 517.0 pence per
Darktrace Share on 25 April 2024 (being the last Business Day
before the date of this announcement);
·
19.6 per cent. to the highest closing share price of
518.6 pence per Darktrace Share for the
twelve month period ended 25 April 2024 (being the last Business
Day before the date of this announcement);
·
46.0 per cent. to the 21 March 2024 secondary placing price
of 425.0 pence per Darktrace Share; and
·
148.1 per cent. to the IPO price of 250 pence per Darktrace
Share on 30 April 2021;
o the Acquisition
represents an EV / Revenue multiple of 8.1 times, and EV / Adjusted
EBITDA multiple of 34.2 times the Darktrace Group's revenue of $616
million and Adjusted EBITDA of $146 million for the twelve months
ending 31 December 2023, respectively;
o feedback
received by the Darktrace Board from certain of Darktrace's largest
shareholders that it has consulted on the Acquisition
has been supportive, as reflected by Thoma Bravo having
procured irrevocable commitments to vote in favour of the
resolutions relating to the Acquisition at the Meetings, from KKR
DA and Summit Partners in respect of, in aggregate, 79,240,911
Darktrace Shares (representing approximately 11.3 per cent. of the
existing issued ordinary share capital of Darktrace);
and
o the Acquisition
will provide Darktrace access to a strong financial partner in
Thoma Bravo with deep sector and US markets expertise who
can support Darktrace's growth and investment in continued
innovation in cybersecurity artificial intelligence in order to
offer an expanded product portfolio across a deeper set of
segments, industries and markets to deliver value to customers.
This includes Thoma Bravo's deep experience and expertise in the US
market, which remains a key focus geography for Darktrace.
Irrevocable undertakings
· Bidco has
received irrevocable undertakings from certain Darktrace Directors
and senior employees who hold Darktrace Shares to vote (or, where
applicable, procure voting) in favour of the Scheme at the Court
Meeting and the Resolutions at the General Meeting (or in the event
that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer), in respect of, in aggregate,
21,627,725 Darktrace Shares (representing approximately 3.1 per
cent. of the existing issued ordinary share capital of Darktrace as
at 25 April 2024, being the last Business Day before the date of
this announcement). These undertakings will remain binding in
the event that a higher competing offer for Darktrace is
made.
· Bidco has
also received irrevocable undertakings from certain other Darktrace
Shareholders, being KKR DA and Summit Partners, to vote (or, where
applicable, procure voting) in favour of the Scheme at the Court
Meeting and the Resolutions at the General Meeting (or in the event
that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer), in respect of, in aggregate,
79,240,911 Darktrace Shares (representing approximately 11.3 per
cent. of the existing issued ordinary share capital of Darktrace as
at 25 April 2024, being the last Business Day before the date of
this announcement). These undertakings will also remain
binding in the event that a higher competing offer for Darktrace is
made.
·
Bidco has, therefore, received irrevocable undertakings in
respect of a total of 100,868,636 Darktrace Shares (representing
approximately 14.4 per cent. of the existing issued ordinary share
capital of Darktrace as at 25 April 2024, being the last Business
Day before the date of this announcement).
·
Further details of these irrevocable undertakings, including
the circumstances in which they cease to be binding, are set out
in Appendix 3 to this
announcement.
Information on Bidco and Thoma Bravo
·
Bidco is a private limited company incorporated in England
and Wales and is indirectly wholly-owned by funds managed and/or
advised by Thoma Bravo. Bidco was formed for the purposes of the
Acquisition and has not traded since its date of incorporation, nor
has it entered into any obligations other than in connection with
the Acquisition.
·
Thoma Bravo is one of the largest software-focused investors
in the world, with over $138 billion in assets under management as
of December 31, 2023. The firm invests in growth-oriented,
innovative companies operating in the software and technology
sectors. Leveraging Thoma Bravo's deep sector expertise and proven
strategic and operational capabilities, the firm collaborates with
its portfolio companies to implement operating best practices and
drive growth initiatives. Over the past 20 years, Thoma Bravo has
acquired or invested in more than 465 companies representing
approximately $260 billion in enterprise value (including control
and non-control investments). The firm has offices in Chicago,
London, Miami, New York and San Francisco.
Information on Darktrace
· Darktrace
is a global leader in cybersecurity artificial intelligence, with a
mission to free the world from cyber disruption. The Darktrace
ActiveAI Security Platform provides a full lifecycle approach to
cyber resilience that, within seconds, can autonomously spot and
respond to known and unknown in-progress threats across an
organisation's entire ecosystem, including cloud, apps, email,
endpoint, network and operational technology. Darktrace's research
and development teams have made breakthrough innovations resulting
in over 175 patent applications filed. The Darktrace Group employs
over 2,300 people around the world and protects over 9,400
customers globally from advanced cyber threats. The Darktrace Group
is headquartered in Cambridge, UK with offices in 24 countries
across Europe, Americas, Asia-Pacific.
· The
Darktrace Shares are listed on the Premium Segment of the Official
List and are admitted to trading on the Main Market of the London
Stock Exchange.
Timetable and conditions
· It
is intended that the Acquisition will be implemented by way of a
Court‑sanctioned scheme of arrangement under Part 26 of the 2006
Act (although Bidco reserves the right to effect the Acquisition by
way of an Offer, subject to the consent of the Panel and the terms
of the Cooperation Agreement).
·
The Acquisition is conditional on, among other
things, the approval of the requisite majority of Scheme
Shareholders at the Court Meeting and Darktrace Shareholders at the
General Meeting. The Court Meeting and the General Meeting are
required to enable Scheme Shareholders and Darktrace Shareholders,
respectively, to consider and, if thought fit, vote in favour of
the Scheme and the Resolutions to implement the Scheme. In order to
become Effective, the Scheme must be approved by a majority in
number of Scheme Shareholders, present and voting at the Court
Meeting, whether in person or by proxy, representing 75 per cent.
or more in value of the Scheme Shares voted. In addition, the
Resolutions include a special resolution in connection with
implementing the Scheme which must be passed by Darktrace
Shareholders representing at least 75 per cent. of votes cast at
the General Meeting. In addition, following the Court Meeting, the
Scheme must be sanctioned by the Court.
· The
Conditions to the Acquisition are set out in full in
Appendix 1 to this announcement along with
certain other terms; the full terms and conditions will be provided
in the Scheme Document. The Conditions include the receipt of
regulatory approvals as further described in this
announcement.
· It
is expected that the Scheme Document, containing further
information about the Acquisition and notices of the Court Meeting
and General Meeting, together with the associated forms of proxy,
will be posted to Darktrace Shareholders as soon as practicable and
in any event within 28 days of this announcement (or such later
time as Darktrace, Bidco and the Panel agree) and the Meetings are
expected to be held as soon as reasonably practicable thereafter.
Subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, the Scheme Document will also be made
available on Darktrace's website at
https://ir.darktrace.com.
· The
Acquisition is currently expected to complete during the third or
fourth quarter of 2024, subject to the satisfaction or (where
applicable) waiver of the Conditions. An expected timetable of key
events relating to the Acquisition will be set out in the Scheme
Document.
·
Commenting on this
announcement, Gordon
Hurst, the Chair of
Darktrace, said:
"The proposed
offer represents an attractive premium and an opportunity for
shareholders to receive the certainty of a cash consideration at a
fair value for their shares.
"The proposed acquisition will provide
Darktrace access to a strong financial partner in Thoma Bravo, with
deep software sector expertise, who can enhance the Company's
position as a best-in-class cyber AI business headquartered in the
UK."
·
Commenting on this
announcement, Poppy Gustafsson
OBE, the CEO of
Darktrace, said:
"I am
immensely proud of our brilliant business and people. From our base
in Cambridge, we are building a world-leading company using a
unique form of artificial intelligence to address the societal
challenge of cybersecurity.
This proposed
offer represents the next stage in our growth journey and I am
excited by the many opportunities we have ahead of us. Our
technology has never been more relevant in a world increasingly
threatened by AI-powered cyberattacks. In the face of this, we are
expanding our product portfolio, entering new markets, and focused
on delivering for our customers, partners and
colleagues."
·
Commenting on this announcement, Andrew Almeida, Partner of
Thoma Bravo, said:
"Darktrace
is at the very cutting edge of cybersecurity technology, and we
have long been admirers of its platform and capability in
artificial intelligence. The pace of innovation in cybersecurity is
accelerating in response to cyber threats that are simultaneously
complex, global and sophisticated. Darktrace is driven by a culture
of innovation and we are excited by the opportunity to work
alongside Darktrace's team and accelerate its development into a
scaled, global leader, further strengthening its capability and
offer to customers. Thoma Bravo has been investing exclusively in
software for over twenty years and we will bring to bear the full
range of our platform, operational expertise and deep experience of
cybersecurity in supporting Darktrace's growth."
This summary
should be read in conjunction with, and is subject to, the full
text of this announcement and the Appendices. The conditions to,
and certain further terms of, the Acquisition are set out in
Appendix 1. The bases and sources for certain financial information
contained in this announcement are set out in Appendix 2. Details
of irrevocable undertakings received by Bidco are set out in
Appendix 3. Certain definitions and terms used in this announcement
are set out in Appendix 4.
Enquiries
Thoma
Bravo
Megan Frank, Head of Communications and
Marketing
|
via FGS
Global
|
Goldman Sachs (Financial Adviser to Thoma
Bravo and Bidco)
|
+44 20 7774
1000
|
Mark Sorrell
Nicholas van den Arend
Chris Emmerson
Cara Pazdon
|
|
FGS
Global (PR Adviser to Thoma Bravo and Bidco)
Faeth Birch
Sophie Scott
Alastair Elwen
Amanda Healy
|
+44 207 251
3801
|
Darktrace
Via Headland
|
+44 (0)20 3805
4852
|
Jefferies (Joint Financial
Adviser and Corporate Broker to Darktrace)
Philip Yates
Dominic Lester
Nandan Shinkre
Paul Bundred
|
+44 20 7029
8000
|
Qatalyst
Partners (Joint Financial Adviser to
Darktrace)
Peter Spofforth
Jason DiLullo
|
+44 (0)20 3700
8820
|
Headland (PR Adviser to
Darktrace)
Nigel Prideaux
Henry Wallers
|
+44 (0)20 3805
4852
+44 (0)20 3805
4839
|
Kirkland & Ellis International LLP is
acting as legal adviser to Bidco and Thoma Bravo.
Latham & Watkins (London) LLP is acting as
legal adviser to Darktrace.
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.
Jefferies
International Limited ("Jefferies"), which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively
as financial adviser to Darktrace and no one else in connection
with the matters set out in this announcement and will not be
responsible to anyone other than Darktrace for providing the
protections afforded to clients of Jefferies nor for providing
advice in relation to the matters set out in this announcement.
Neither Jefferies 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 Jefferies in connection with
this announcement, any statement contained herein or
otherwise.
Qatalyst
Partners Limited ("Qatalyst
Partners"), which is authorised in the UK by the FCA, is
acting exclusively as financial adviser to Darktrace and no one
else in connection with the Acquisition and will not be acting for
any other person and will not be responsible to any person other
than Darktrace for providing the protections afforded to clients of
Qatalyst Partners or for advising any other person in respect of
the matters referred to in this announcement. No representation or
warranty, express or implied, is made by Qatalyst Partners as to
the contents of this announcement.
This
announcement is for information purposes only and is not intended
to, and does not, constitute, or form part of, an offer, invitation
or the solicitation of an offer 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, nor shall there be any sale,
issuance or transfer of securities of Darktrace in any jurisdiction
in contravention of applicable law. The Acquisition will be
implemented 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 vote in respect of the Scheme or other
response in relation to the Acquisition should be made only on the
basis of the information contained in the Scheme Document (or, if
the Acquisition is implemented by way of an Offer, the offer
document).
This
announcement contains inside information in relation to Darktrace
for the purposes of Article 7 of the Market Abuse Regulation. The
person responsible for arranging the release of this announcement
on behalf of Darktrace is James Sporle, General Counsel and
Company Secretary. Darktrace's Legal Entity Identifier
is 213800PC5S5P9CSNFC89.
This
announcement does not constitute a prospectus, prospectus
equivalent document or exempted document.
If
you are in any doubt about the contents of this announcement or the
action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas
Shareholders
The release,
publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and
therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves of, and
observe, any applicable legal or regulatory requirements. Any
failure to comply with such requirements 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.
This announcement has been prepared in accordance with and for the
purpose of complying with English law, the Takeover Code, the
Listing Rules, 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 Darktrace 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. Any person
(including, without limitation, nominees, trustees and custodians)
who would, or otherwise intends to, forward this announcement, the
Scheme Document or any accompanying document to any jurisdiction
outside the UK should refrain from doing so and seek appropriate
professional advice before taking any action. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their Darktrace 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 (or, if the Acquisition is
implemented by way of an Offer, the offer
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, from, 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 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, without limitation, agents, 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, into, from, 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.
Further
details in relation to Overseas Shareholders will be included in
the Scheme Document (or, if the Acquisition is implemented by way
of an Offer, the offer document).
Notice to U.S.
Darktrace Shareholders
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 law. A transaction effected by means of a scheme of
arrangement is not subject to the tender offer or proxy
solicitation rules under the U.S. Securities Exchange Act of 1934
(the "U.S. Exchange Act").
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
U.S. 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 U.S. 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 U.S. laws and
regulations.
It may be
difficult for U.S. holders of Darktrace Shares to enforce their
rights and any claim arising out of the U.S. federal laws, since
Bidco and Darktrace are located in a non-U.S. jurisdiction, and
some or all of their officers and directors may be residents of a
non-U.S. jurisdiction. U.S. holders of Darktrace Shares may not be
able to sue a non-U.S. company or its officers or directors in a
non-U.S. court for violations of the U.S. securities laws. Further,
it may be difficult to compel a non-U.S. company and its affiliates
to subject themselves to a U.S. court's
judgement.
In accordance
with normal UK practice and pursuant to Rule 14e-5(b) of the U.S.
Exchange Act, Thoma Bravo or their nominees, or their brokers
(acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, Darktrace Shares outside of the
U.S., other than pursuant to the Acquisition, until the date on
which the Acquisition becomes Effective, lapses or is otherwise
withdrawn. Also, in accordance with Rule 14e-5(b) of the U.S.
Exchange Act, Goldman Sachs will continue to act as an exempt
principal trader in Darktrace shares on the London Stock Exchange.
These purchases may occur either in the open market at prevailing
prices or in private transactions at negotiated prices. Any
information about such purchases will be disclosed as required in
the United Kingdom, will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website,
www.londonstockexchange.com.
U.S.
Darktrace Shareholders also should be aware that the transaction
contemplated herein may have tax consequences in the U.S. and, that
such consequences, if any, are not described herein. U.S. Darktrace
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 Darktrace 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
Darktrace 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 Darktrace (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 "prepares", "plans", "expects" or
"does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal",
"estimates", "forecasts", "cost-saving", "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. Forward looking statements may include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of Bidco's, Darktrace's,
any member of the Bidco Group or any member of the Darktrace
Group's operations and potential synergies resulting from the
Acquisition; and (iii) the effects of global economic conditions
and governmental regulation on Bidco's, Darktrace's, any member of
the Bidco Group or any member of the Darktrace Group's
business.
Although
Bidco and Darktrace believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and Darktrace 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; changes in the global political,
economic, business and competitive environments and in market and
regulatory forces; changes in future exchange and interest rates;
changes in tax rates; future business combinations or disposals;
changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in 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 Darktrace 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
Darktrace operate and changes in laws or in supervisory
expectations or requirements. Other unknown or unpredictable
factors could cause actual results to differ materially from those
expected, estimated or projected in the forward-looking statements.
If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual
results may differ materially from those expected, estimated or
projected. Such forward-looking statements should therefore be
construed in the light of such factors. Neither Bidco nor
Darktrace, 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.
Specifically,
statements of estimated cost savings and synergies related to
future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. Due to the scale of the
Darktrace Group, there may be additional changes to the Darktrace
Group's operations. As a result, and given the fact that the
changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.
Other than in
accordance with their legal or regulatory obligations, neither
Bidco nor Darktrace is under any obligation, and Bidco and
Darktrace 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) of the Takeover Code applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) 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
(London time) 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 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
In accordance
with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the
Takeover Code will be made available, subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions, on Darktrace's website at https://ir.darktrace.com
by no later than 12 noon (London time) on the Business Day
following this announcement. For the avoidance of doubt, neither
the content of this website nor of any website accessible from
hyperlinks set out in this announcement is incorporated by
reference or forms part of this announcement.
No profit forecasts, estimates or quantified
benefits statements
No statement
in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share for Darktrace for the current or
future financial years would necessarily match or exceed the
historical published earnings or earnings per share for
Darktrace.
Requesting hard copy documents
In accordance
with Rule 30.3 of the Takeover Code, Darktrace Shareholders,
persons with information rights and participants in Darktrace Share
Plans may request a hard copy of this announcement, free of charge,
by contacting
Darktrace's registrar, Equiniti Limited, either in writing to
Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United
Kingdom or by calling +44 (0) 333 207 6530. You may also request
that all future documents, announcements and information to be sent
to you in relation to the Acquisition should be in hard copy form.
Calls outside the U.K. will be charged at the applicable
international rate. Lines are open between 8.30 a.m. and 5.30 p.m.
(London time) Monday to Friday excluding public holidays in England
and Wales. For
persons who receive a copy of this announcement in electronic form
or via a website notification, a hard copy of this announcement
will not be sent unless so requested. In accordance with Rule 30.3
of the Takeover Code, such persons may also request that all future
documents, announcements and information to be sent to them in
relation to the Acquisition should be in hard copy
form.
Electronic Communications
Please be
aware that addresses, electronic addresses and certain other
information provided by Darktrace Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Darktrace may be provided to Bidco during the
offer period as required under Section 4 of Appendix 4 of the
Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Rounding
Certain
figures included in this announcement have been subjected to
rounding adjustments. Accordingly, figures shown for the same
category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an arithmetic
aggregation of figures that precede them.
General
Bidco
reserves the right to elect, with the consent of the Panel (where
necessary) and subject to the terms of the Cooperation Agreement,
to implement the Acquisition by way of an Offer as an alternative
to the Scheme. In such an event, an Offer will be implemented on
substantially the same terms, so far as applicable, as those which
would apply to the Scheme (subject to appropriate
amendments).
If the
Acquisition is effected by way of an Offer, and such an Offer
becomes or is declared unconditional in all respects and sufficient
acceptances are received, Bidco intends to exercise its rights to
apply the provisions of Chapter 3 of Part 28 of the 2006 Act so as
to acquire compulsorily the remaining Darktrace Shares in respect
of which the Offer has not been accepted.
Investors
should be aware that Bidco may purchase Darktrace Shares otherwise
than under any Offer or the Scheme, including pursuant to privately
negotiated purchases.
Rule 2.9 of
the Takeover Code
For the
purposes of Rule 2.9 of the Takeover Code, Darktrace confirms that,
as at 26 April 2024 2024, it had in issue 703,683,540 ordinary
shares of 1 pence each admitted to trading on the Main Market of
the London Stock Exchange, and 3,323,886 Treasury Shares. The ISIN
for the shares is GB00BNYK8G86.
Disclaimer
The
information contained herein does not constitute an offer to sell,
nor a solicitation of an offer to buy, any security, and may not be
used or relied upon in connection with any offer or solicitation.
Any offer or solicitation in respect of Thoma Bravo and Thoma Bravo
Funds will be made only through a confidential private placement
memorandum and related documents which will be furnished to
qualified investors on a confidential basis in accordance with
applicable laws and regulations. The information contained herein
is not for publication or distribution to persons in the U.S. Any
securities referred to herein have not been and will not be
registered under the U.S. Securities Act of 1933, as amended, and
may not be offered or sold without registration thereunder or
pursuant to an available exemption therefrom. Any offering of
securities to be made in the U.S. would have to be made by means of
an offering document that would be obtainable from the issuer or
its agents and would contain detailed information about the issuer
of the securities and its management, as well as financial
information. The securities may not be offered or sold in the U.S.
absent registration or an exemption from
registration.
The
Acquisition will be subject to English law, the jurisdiction of the
Court, and the applicable requirements of the Takeover Code, the
Panel, the London Stock Exchange, the FCA, the Listing Rules and
the Registrar of Companies.
NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO
WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
THAT JURISDICTION
FOR IMMEDIATE
RELEASE
THIS
ANNOUNCEMENT CONTAINS INSIDE INFORMATION
26 APRIL 2024
RECOMMENDED CASH
ACQUISITION
of
Darktrace plc
by
Luke Bidco Limited
(a newly-formed company indirectly
wholly-owned by funds managed and/or advised by Thoma Bravo,
L.P.)
to be implemented by means of a scheme
of arrangement
under Part 26 of the Companies Act 2006
1
Introduction
The boards of directors of Bidco and Darktrace
are pleased to announce that they have reached agreement on the
terms and conditions of a recommended all cash acquisition by Bidco
of the entire issued, and to be issued, ordinary share capital of
Darktrace.
It is intended that the Acquisition will be
implemented by way of a Court‑sanctioned scheme of arrangement
under Part 26 of the 2006 Act (although Bidco reserves the right to
effect the Acquisition by way of an Offer, subject to the consent
of the Panel and the terms of the Cooperation Agreement). The
Conditions to the Acquisition are set out in full in
Appendix 1 to this announcement.
2
The Acquisition
Under the terms of the Acquisition, which will
be subject to the Conditions and further terms set out in
Appendix 1 to this announcement and the
full terms and conditions to be set out in the Scheme Document,
each Darktrace Shareholder will be entitled to receive:
for each Darktrace Share: $7.75 in
cash
The GBP equivalent value of the Acquisition
price per Darktrace Share based on the Announcement Exchange Rate,
being 620 pence, represents a premium of
approximately:
· 44.3 per
cent. to the volume-weighted average price of 429.9 pence per
Darktrace Share for the three-month period ended 25 April 2024
(being the last Business Day before the date of this
announcement);
· 20.0 per
cent. to the Closing Price of 517.0 pence per Darktrace Share on 25
April 2024 (being the last Business Day before the date of this
announcement);
· 19.6 per
cent. to the highest closing share price of 518.6 pence per
Darktrace Share for the twelve month period ended 25 April 2024
(being the last Business Day before the date of this
announcement);
· 46.0 per
cent. to the 21 March 2024 secondary placing price of 425.0 pence
per Darktrace Share; and
· 148.1 per
cent. to the IPO price of 250 pence per Darktrace Share on 30 April
2021.
The Acquisition values Darktrace's entire
issued, and to be issued, ordinary share capital at approximately
$5,315 million on a fully diluted basis and implies an enterprise
value of approximately $4,992 million (which is equivalent to
£4,254 million and £3,995 million respectively based on the
Announcement Exchange Rate) and a multiple of approximately 34
times Darktrace's Adjusted EBITDA for the twelve months ended 31
December 2023 of $146 million.
The Darktrace Shares will be acquired pursuant
to the Acquisition fully paid and free from all liens, charges,
equities, encumbrances, rights of pre‑emption and any other
interests of any nature whatsoever and together with all rights
attaching thereto, including without limitation voting rights and
the right to receive and retain in full all dividends and other
distributions (if any) announced, declared, made or paid with a
record date on or after the Effective Date.
Bidco will procure that a facility will be made
available under which Scheme Shareholders will be able to elect
(subject to the terms and conditions of the facility) to receive
the cash consideration in Sterling (after deduction of any
transaction or dealing costs associated with the conversion) at the
applicable market exchange rate on the latest practicable date for
fixing such rate prior to the relevant payment date. Further
details of this facility and the election by Scheme Shareholders
wishing to receive their cash consideration in Sterling will be set
out in the Scheme Document and the Form of Election. On the basis
of the Announcement Exchange Rate, the cash consideration implies
an equivalent value of 620 pence per Darktrace Share. For any
Scheme Shareholder electing to be paid their cash consideration in
Sterling, the amount per Darktrace Share received may, depending on
the prevailing exchange rate, result in a payment below or above
620 pence per Darktrace Share.
If, on or after the date of this announcement
and prior to the Acquisition becoming Effective, any dividend
and/or other distribution and/or other return of capital or value
is announced, declared, made or paid or becomes payable in respect
of the Darktrace Shares, Bidco reserves the right to reduce the
consideration payable under the terms of the Acquisition for the
Darktrace Shares by an amount up to the aggregate amount of such
dividend and/or distribution and/or other return of capital or
value, in which case any reference in this announcement to the
consideration payable under the terms of the Acquisition will be
deemed to be a reference to the consideration as so reduced. Any
exercise by Bidco of its rights referred to in this paragraph shall
be the subject of an announcement and, for the avoidance of doubt,
shall not be regarded as constituting any revision or variation of
the terms of the Scheme or the Acquisition. In such circumstances,
Darktrace Shareholders would be entitled to retain any such
dividend, distribution and/or other return of capital or
value.
3
Background to and reasons for the Acquisition
Thoma Bravo believes that the acquisition of
Darktrace represents an attractive opportunity to increase its
exposure to the large and growing cybersecurity market, and to
invest to accelerate Darktrace's continued development and further
scale the business globally.
Darktrace is a global leader in cybersecurity
artificial intelligence. Thoma Bravo recognises that Darktrace is a
pioneer in using self-learning artificial intelligence to
neutralise cyber threats and automate responses to cyber incidents,
leveraging its long-standing research and development expertise.
Rather than study historic attacks, Darktrace's technology
continuously learns and updates its knowledge of an organisation's
business data and applies that understanding to help transform
security operations to a state of proactive cyber resilience. As a
result, Darktrace has become a leader in cybersecurity artificial
intelligence now providing a full lifecycle approach to
cybersecurity enabling its 9,400 customers to identify, stop and
respond to all known and unknown threats, across all aspects of an
organisation's cybersecurity tools. Thoma Bravo recognises the
strength of Darktrace's ActiveAI Security Platform, the expertise
of its Cambridge-based technology team, the track record of its
experienced management team, and the compelling nature of its
resilient financial model.
The cybersecurity market is evolving at pace
and the volume and sophistication of cyber threats and attacks
faced is rapidly increasing. However, the market remains
fragmented, with few truly global players. Serving the world's
largest customers and enterprises requires Darktrace to continually
make significant technology investments and further scale globally,
to ensure that its platform can stay ahead of changing cyber
threats.
Thoma Bravo believes that private ownership can
facilitate its development. Thoma Bravo has a long track record of
providing capital and strategic support to experienced management
teams, growing software and technology companies, and creating
highly skilled jobs. A partnership with Thoma Bravo would give
Darktrace a unique opportunity to accelerate Darktrace's growth and
the development of AI augmented cyber solutions for its customers
and grow over time; in particular, through:
·
continuing Darktrace's strong organic growth momentum, with help
from Thoma Bravo's deep experience of growing enterprise software
businesses as well as through opportunities and learnings from its
large software portfolio;
·
utilising Thoma Bravo's M&A expertise to grow the
Darktrace platform in the highly fragmented cybersecurity market;
and
·
leveraging Thoma Bravo's proprietary operational best
practices built over the course of 40 years of experience to
further build a best-in-class software franchise.
4
Recommendation
The Darktrace Directors, who have been so
advised by Jefferies and Qatalyst Partners as to the financial
terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing their advice, Jefferies and
Qatalyst Partners have taken into account the commercial
assessments of the Darktrace Directors. Jefferies and Qatalyst
Partners are providing independent financial advice to the
Darktrace Directors for the purposes of Rule 3 of the Takeover
Code.
Accordingly, the Darktrace Directors intend to
recommend unanimously that the Darktrace Shareholders vote, or
procure voting, in favour of the Scheme at the Court Meeting and
the Resolutions at the General Meeting (or in the event that the
Acquisition is implemented by an Offer, to accept or procure
acceptance of such Offer), as the Darktrace Directors who hold
interests in Darktrace Shares (in a personal capacity or through a
nominee) have irrevocably undertaken to do, or to procure to be
done, in respect of their own beneficial holdings (or those
Darktrace Shares over which they have control), being, in
aggregate 6,132,989 Darktrace Shares
(representing approximately 0.88 per
cent. of the existing issued ordinary share capital of Darktrace)
as at 25 April 2024, being the Business Day prior to the date of
this announcement.
5
Background to and reasons for the recommendation
Since its inception in 2013, Darktrace has
rapidly grown to become a successful global leader in cybersecurity
artificial intelligence, currently employing over 2,300 people
around the world and protecting over 9,400 customers globally from
advanced cyber threats. Rather than study historic attacks,
Darktrace's technology continuously learns and updates its
knowledge of an organisation's business data and applies that
understanding to help transform security operations to a state of
proactive cyber resilience. The Darktrace ActiveAI Security
Platform™ provides a full lifecycle approach to cyber resilience
that can autonomously spot and respond to known and unknown in
progress threats within seconds across the entire organisation,
including cloud, apps, email, endpoint, network and operational
technology.
In 2021, Darktrace successfully listed on the
London Stock Exchange, raising capital to support its future
growth, including investments in research and development and
product innovation to address the growing threat of cyber
disruption, the hiring of senior leaders with deep functional
expertise who in turn have evolved the business for its next phase
of growth, particularly across its Go-To-Market function alongside
investments in the systems, tools and processes needed to support a
rapidly growing business. The business saw a temporary impact of
these changes in the first quarter of the 2024 fiscal year and now
these investments are substantially paying off with Darktrace
reporting a strong financial performance in its recent first half
results and third quarter trading update.
Whilst the Darktrace Board remain confident
that Darktrace's strategy can continue to deliver attractive
returns for shareholders and that Darktrace has a strong future as
a public company, the Darktrace Board believes that Darktrace's
operating and financial achievements have not been reflected
commensurately in its valuation with shares trading at a
significant discount to its global peer group. The Darktrace Board
recognises that there are risks to, as well as uncertainty as to
the timing and delivery of, shareholder returns on the public
market and the Acquisition provides an opportunity for Darktrace
Shareholders to receive the certainty of cash consideration at a
fair value for their shares at this time in Darktrace's
evolution.
Through its partnership with Thoma Bravo,
Darktrace will be further enabled to deliver on its strategy in a
stable and private setting, to create efficiently developed
cybersecurity products, leverage differentiated technology to drive
product adoption and sales growth, and hire and retain talent to
drive innovation and business success.
Darktrace is a proud contributor to the British
technology, AI and cyber security ecosystem, having substantially
gained from the strong academic heritage of machine learning in the
UK and the world-class British intelligence community. In addition
to the financial terms of the Acquisition, in its evaluation of
Thoma Bravo as a suitable owner of Darktrace from the perspective
of all stakeholders, the Darktrace Board have also taken into
account Thoma Bravo's intentions for the business, including its
employees, customers, suppliers and business partners and is
encouraged that Thoma Bravo intends to support the management team
as they continue to grow Darktrace as an independent business,
headquartered in the UK.
·
This includes Thoma Bravo's intentions that employees are
appropriately incentivised to support the long-term growth of the
business, that Darktrace retains its research and development
capabilities in the UK and the Netherlands, and that there will be
no material restructurings or changes to Darktrace's Cambridge, UK
headquarters, or other business operations.
·
Darktrace continues to be a British tech champion operating
at the forefront of AI to solve the problem of cyber security in
the UK and around the world and will continue to engage
constructively with its stakeholders, including government, to
contribute to AI and cyber security resilience.
·
Darktrace will continue to create high skilled jobs in the UK
and invest in building world-class cyber AI capabilities to improve
UK resilience. Being able to draw on Thoma Bravo's resources and
expertise will support Darktrace's continued growth globally,
resulting in further opportunities for its people.
Having carefully considered the Acquisition in
accordance with its fiduciary duties the Darktrace Board believes
that the terms of the Acquisition, including the price, are such
that shareholders should be provided with the opportunity to
consider them. The Darktrace Board notes that it has previously
reviewed and rejected unsolicited proposed offers from Thoma Bravo
on the basis that they did not fairly represent the value of the
Darktrace business. The Darktrace Board's recommendation takes into
consideration that:
· the
Acquisition is priced at a premium based on the Announcement
Exchange Rate of approximately:
o 44.3 per cent. to the
volume-weighted average price of 429.9 pence per Darktrace Share
for the three-month period ended 25 April 2024 (being the last
Business Day before the date of this announcement);
o 20.0 per cent. to the
Closing Price of 517.0 pence per Darktrace Share on 25 April 2024
(being the last Business Day before the date of this
announcement);
o 19.6 per cent. to the
highest closing share price of 518.6 pence per Darktrace Share for
the twelve month period ended 25 April 2024 (being the last
Business Day before the date of this announcement);
o 46.0 per cent. to the 21
March 2024 secondary placing price of 425.0 pence per Darktrace
Share; and
o 148.1 per cent. to the IPO
price of 250 pence per Darktrace Share on 30 April 2021;
· the
Acquisition represents an EV / Revenue multiple of 8.1 times, and
EV / Adjusted EBITDA multiple of 34.2 times the Darktrace Group's
revenue of $616 million and Adjusted EBITDA of $146 million for the
twelve months ending 31 December 2023, respectively;
·
feedback received by the Darktrace Board from certain of
Darktrace's largest shareholders that it has consulted on
the Acquisition has been supportive, as reflected by
Thoma Bravo having procured irrevocable commitments to vote in
favour of the resolutions relating to the Acquisition at the
Meetings, from KKR DA and Summit Partners in respect of, in
aggregate, 79,240,911 Darktrace Shares (representing approximately
11.3 per cent. of the existing issued ordinary share capital of
Darktrace); and
· the
Acquisition will provide Darktrace access to a strong financial
partner in Thoma Bravo with deep sector and US markets expertise
who can support Darktrace's growth and investment in continued
innovation in cybersecurity artificial intelligence in order to
offer an expanded product portfolio across a deeper set of
segments, industries and markets to deliver value to customers.
This includes Thoma Bravo's deep experience and expertise in the US
market, which remains a key focus geography for
Darktrace.
6
Information relating to Bidco AND Thoma Bravo
Bidco
Bidco is a private limited company incorporated
in England and Wales and is indirectly wholly-owned by funds
managed and/or advised by Thoma Bravo. Bidco was formed for the
purposes of the Acquisition and has not traded since its date of
incorporation, nor has it entered into any obligations other than
in connection with the Acquisition.
The current directors of Bidco are Seth Boro,
Andrew Almeida, Nabil Hamade and Sacha May. Further details in
relation to Bidco will be contained in the Scheme
Document.
Thoma Bravo
Thoma Bravo is one of the largest
software-focused investors in the world, with over $138 billion in
assets under management as of December 31, 2023. The firm invests
in growth-oriented, innovative companies operating in the software
and technology sectors. Leveraging Thoma Bravo's deep sector
expertise and proven strategic and operational capabilities, the
firm collaborates with its portfolio companies to implement
operating best practices and drive growth initiatives. Over the
past 20 years, Thoma Bravo has acquired or invested in more than
465 companies representing approximately $260 billion in enterprise
value (including control and non-control investments). The firm has
offices in Chicago, London, Miami, New York and San
Francisco.
7
Information relating to Darktrace
Darktrace is a global leader in cybersecurity
artificial intelligence, with a mission to free the world from
cyber disruption. The Darktrace ActiveAI Security Platform provides
a full lifecycle approach to cyber resilience that, within seconds,
can autonomously spot and respond to known and unknown in-progress
threats across an organisation's entire ecosystem, including cloud,
apps, email, endpoint, network and operational technology.
Darktrace's research and development teams have made breakthrough
innovations resulting in over 175 patent applications filed. The
Darktrace Group employs over 2,300 people around the world and
protects over 9,400 customers globally from advanced cyber threats.
The Darktrace Group is headquartered in Cambridge, UK with offices
in 24 countries across Europe,
Americas, Asia-Pacific.
For the twelve months ended 31
December 2023, the Darktrace Group generated revenue
of $616 million and Adjusted EBITDA of $146 million. Darktrace
currently has annualised recurring revenues of $702 million and
holds approximately $1,254 million of remaining performance
obligations (RPO) on balance sheet as of 31 December
2023.
Darktrace is a public limited company
registered in England and Wales. The Darktrace Shares are listed on
the Premium Segment of the Official List and are admitted to
trading on the Main Market of the London Stock Exchange, with a
fully diluted capitalisation of £3,540 million as at 25 April 2024
(being the last Business Day before the date of this
announcement).
8
Irrevocable undertakings
As described above, Bidco has received
irrevocable undertakings from certain Darktrace Directors and
senior employees who hold Darktrace Shares to vote (or, where
applicable, procure voting) in favour of the Scheme at the Court
Meeting and the Resolutions at the General Meeting (or in the event
that the Acquisition is implemented by an Offer, to accept or
procure acceptance of such Offer), in respect of, in
aggregate, 21,627,725 Darktrace Shares (representing
approximately 3.1 per cent. of the existing issued
ordinary share capital of Darktrace as at 25 April 2024, being the
last Business Day before the date of this announcement). These
undertakings will remain binding in the event that a higher
competing offer for Darktrace is made.
Bidco has also received irrevocable
undertakings from certain other Darktrace Shareholders, being KKR
DA and Summit Partners, to vote (or, where applicable, procure
voting) in favour of the Scheme at the Court Meeting and the
Resolutions at the General Meeting (or in the event that the
Acquisition is implemented by an Offer, to accept or procure
acceptance of such Offer), in respect of, in aggregate,
79,240,911 Darktrace Shares (representing
approximately 11.3 per cent. of the
existing issued ordinary share capital of Darktrace as at
25 April 2024, being the last Business Day
before the date of this announcement). These undertakings will also
remain binding in the event that a higher competing offer for
Darktrace is made.
Bidco has, therefore, received irrevocable
undertakings in respect of a total of
100,868,636 Darktrace Shares (representing
approximately 14.4 per cent. of the
existing issued ordinary share capital of Darktrace as at 25 April
2024, being the last Business Day before the date of this
announcement).
Further details of these irrevocable
undertakings, including the circumstances in which they cease to be
binding, are set out in Appendix 3
to this announcement.
9
Financing of the Acquisition
The cash consideration payable to Darktrace
Shareholders under the terms of the Acquisition will be financed
by: (i) equity to be invested by Thoma Bravo Funds; and (ii) third
party financing provided by certain third party providers of (A) an
interim first lien term facility in an aggregate amount principal
amount of $1,685,000,000 and (B) an interim second lien term
facility in an aggregate principal amount of $460,000,000 to be
provided under the Interim Facilities Agreement.
Goldman Sachs International, in its capacity as
financial adviser to Bidco, is satisfied that sufficient resources
are available to Bidco to satisfy in full the cash consideration
payable to Darktrace Shareholders under the terms of the
Acquisition.
Further information on the financing of the
Acquisition will be set out in the Scheme Document.
10
Offer‑related arrangements
Confidentiality Agreement
On 27 March 2024, Thoma Bravo and Darktrace
entered into a Confidentiality Agreement in relation to the
Acquisition, pursuant to which, amongst other
things, Thoma Bravo has undertaken to: (i) subject to certain
exceptions, keep information relating to Darktrace and the
Acquisition confidential and not to disclose it to third parties;
and (ii) use such confidential information only in connection with
the Acquisition. These confidentiality obligations will remain in
force until the earlier of (a) the Acquisition becoming Effective
(if implemented through the Scheme) or is declared wholly
unconditional (if implemented as an Offer); and (b) 27
March 2026. The Confidentiality Agreement contains
standstill provisions which restricted Thoma Bravo from acquiring
or offering to acquire interests in certain securities of
Darktrace; those restrictions ceased to apply on the making of this
announcement. The Confidentiality Agreement also contains
restrictions on Thoma Bravo soliciting or employing certain of
Darktrace's senior or key employees.
Cooperation Agreement
Pursuant to the Cooperation Agreement, Bidco
and Darktrace have, amongst other things, each agreed to: (i)
cooperate in relation to obtaining any consents, clearances,
permissions, waivers and/or approvals as may be necessary, and the
making of all filings as may be necessary, from or under the law,
regulations or practices applied by any applicable regulatory
authority, in connection with the Acquisition; and (ii) cooperate
in preparing and implementing appropriate proposals in relation to
the Darktrace Share Plans.
In addition, Bidco has agreed to certain
provisions if the Scheme should switch to an Offer. The Cooperation
Agreement will terminate in certain circumstances, including (in
respect of (ii) to (iv), upon service of written notice): (i) if
the Acquisition is, with the permission of the Panel, withdrawn,
terminates or lapses in accordance with its terms prior to the Long
Stop Date, subject to certain limited exclusions; (ii) if a third
party announces a firm intention to make an offer for Darktrace
which is recommended in whole or in part by the Darktrace Board or
which completes, becomes effective or becomes unconditional; (iii)
if prior to the Long Stop Date any Condition has been invoked by
Bidco (with the consent of the Panel, if required); (iv) if the
Darktrace Directors withdraw their recommendation of the
Acquisition; (v) unless otherwise agreed by Bidco and Darktrace in
writing or required by the Panel, if the Scheme does not become
Effective in accordance with its terms by the Long Stop Date; or
(vi) otherwise as agreed in writing between Bidco and
Darktrace.
Pursuant to the terms of the Cooperation
Agreement and the requirements of Paragraph 3(g)(i) of Appendix 7
to the Takeover Code, Bidco undertakes
that it will deliver a notice in writing to Darktrace and the Panel
by no later than the Business Day prior to the Sanction Hearing
confirming either: (i) the satisfaction or waiver of the Conditions
(other than the Scheme Conditions (as defined therein)); or (ii) to
the extent permitted by the Panel, that it intends to invoke or
treat as unsatisfied or incapable of satisfaction one or more
Conditions.
Panel Clean Team
Agreement
Darktrace, Thoma Bravo and their respective
legal advisers have entered into the Panel Clean Team Agreement
dated 12 April 2024, the purpose of which is to set
out the terms governing the disclosure of competitively sensitive
information by Darktrace or Darktrace's external legal counsel to
Thoma Bravo's external legal counsel and external experts, as well
as the related collection and analysis and potential destruction of
such competitively sensitive information.
11
Disclosure of interests in Darktrace securities
Except for the irrevocable undertakings
referred to in paragraph 8 above
and Appendix 3, as at 25 April 2024
(being the last Business Day before the date of this announcement)
neither Bidco, nor any of its directors, nor, so far as Bidco is
aware, any person treated as acting in concert (within the meaning
of the Takeover Code) with it for the purposes of the Acquisition
(i) had any interest in or right to subscribe for or had borrowed
or lent any Darktrace Shares or securities convertible or
exchangeable into Darktrace Shares, or (ii) had any short positions
in respect of relevant securities of Darktrace (whether conditional
or absolute and whether in the money or otherwise), including any
short position under a derivative, any agreement to sell or any
delivery obligation or right to require another person to purchase
or take delivery, or (iii) has borrowed or lent any relevant
securities of Darktrace (including, for these purposes, any
financial collateral arrangements of the kind referred to in Note 3
on Rule 4.6 of the Takeover Code) save for any borrowed shares
which have been either on-lent or resold, or (iv) is a party to any
dealing arrangement of the kind referred to in Note 11 on the
definition of acting in concert in the Takeover Code.
It has not been practicable for Bidco to make
enquiries of all of its concert parties in advance of the release
of this announcement. Therefore, if Bidco becomes aware, following
the making of such enquiries, that any of its concert parties have
any additional interests or dealings in the relevant securities of
Darktrace, all relevant details in respect of Bidco's concert
parties will be included in Bidco's Opening Position Disclosure in
accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Code
which must be made on or before 12 noon (London time) on 13 May
2024.
12
REGULATORY ENGAGEMENT
Thoma Bravo firmly believes that the
Acquisition will benefit Darktrace, Darktrace's customers and the
wider technology ecosystem through supporting the development
of enhanced products and Darktrace's
cybersecurity capability. Bidco has agreed with Darktrace under the
terms of the Cooperation Agreement that Thoma Bravo will, with
Darktrace's support and involvement, engage proactively and
collaboratively with the competent regulatory authorities and
government stakeholders, recognising the specific importance of
Darktrace's contribution to the technology ecosystem.
13
Directors, management, employees, pensions, research and
development and locations
Strategic plans for
Darktrace
Thoma Bravo has an extensive history of
partnering with management teams to build leading businesses that
create value for all stakeholders.
Thoma Bravo believes that a partnership with
Thoma Bravo would give Darktrace the unique opportunity to grow and
develop, leveraging Thoma Bravo's access to capital, proprietary
operational best practices and long history of helping companies to
continue their strong organic growth momentum and successfully
pursue M&A opportunities.
In line with market practice for a public offer
process, Bidco completed a period of confirmatory due diligence on
Darktrace prior to this announcement. Following completion of the
Acquisition, Bidco intends to review the entirety of Darktrace's
business and operations over a period of six months, leveraging its
expertise and the deep experience of the Darktrace management team.
Immediately following completion of the Acquisition, Bidco will
focus on:
·
continuing to invest in innovation, growth, and Darktrace's
research and development organisation;
·
implementing operational best practices to create a
best-in-class software franchise;
·
evaluating opportunities to accelerate top-line growth;
and
· the
reduction of non-critical administrative expenses and spending in
areas related to Darktrace's status as a listed company.
Employees, management and research and
development
Bidco attaches great importance to the skills,
knowledge, and expertise of Darktrace's management and employees
and, subject to this paragraph 13,
expects that the existing management and employees of Darktrace
will be key to the success of Darktrace going forward and will
continue to contribute to the long-term success of
Darktrace.
Following completion of the Acquisition,
certain functions which have historically been related to
Darktrace's status as a listed company may no longer be required or
will be reduced in size to reflect Darktrace ceasing to be a listed
company. It is expected that the non-executive directors of
Darktrace will resign as directors of Darktrace with effect from
completion of the Acquisition.
As set out above, following completion of the
Acquisition, Bidco intends to complete a detailed review of the
Darktrace business, leveraging its expertise and the deep
experience of the Darktrace management team. The results of the
review are uncertain and no firm decisions have been made in
relation to specific actions which may be taken. However, Bidco
does not intend to make any material changes to Darktrace's
research and development organisation, which it believes will
continue to be a key driver of innovation and growth. Furthermore,
based on its experience relating to previous transactions, Bidco
does not expect its review to result in a material headcount
reduction. Any headcount reductions will be carried out in
accordance with applicable law (including, in jurisdictions where
relevant, informing and consulting obligations). Nevertheless,
Bidco believes that it is well-positioned to accelerate Darktrace's
growth and performance, which will in turn create greater
employment opportunities for existing and future employees over the
long term.
Existing rights and
pensions
Bidco confirms that, following the Scheme
becoming Effective, the existing contractual and statutory
employment rights, including in relation to pensions, of all
Darktrace management and employees will be fully safeguarded in
accordance with applicable law and as specified further in the
Cooperation Agreement. Bidco does not intend to make any material
change to the conditions of employment of the employees of
Darktrace.
Incentive arrangements
Bidco has not entered into, and has not
discussed any form of incentivisation arrangements, with any of
Darktrace's employees. Bidco intends to put in place appropriate
arrangements for Darktrace employees following completion of the
Acquisition.
Headquarters, locations and fixed
assets
Bidco does not intend to make any changes in
the location of Darktrace's headquarters in Cambridge, operations
or places of business. Bidco does not intend to undertake any
material restructurings, nor changes with respect to the
redeployment of Darktrace's fixed asset base.
Following the Acquisition, Bidco intends that
Darktrace will continue to operate as a standalone business
group.
Trading Facilities
Darktrace Shares are currently listed on the
Official List and admitted to trading on the London Stock Exchange.
As set out in paragraph 16, applications
will be made for the cancellation of the listing of Darktrace
Shares on the Official List and the cancellation of trading of the
Darktrace Shares on the London Stock Exchange.
Rule 19.5 of the Takeover
Code
No statements in this paragraph
13 are "post-offer undertakings" for the
purposes of Rule 19.5 of the Takeover Code.
14
Darktrace Share Plans
Participants in the Darktrace Share Plans will
be contacted regarding the effect of the Acquisition on their
options and awards under the Darktrace Share Plans and an
appropriate proposal will be made to such participants which
reflects their options and awards under the Darktrace Share Plans
in due course. Details of the impact of the Scheme on each of the
Darktrace Share Plans and the proposals will be set out in the
Scheme Document.
15
Scheme process
The Acquisition is subject to the Conditions
and certain further terms referred to in Appendix 1 to this
announcement and to the full terms and conditions to be set out in
the Scheme Document, and will only become Effective if, among other
things, the following events occur on or before the Long Stop Date
(or such later date as the Bidco and Darktrace may, with the
consent of the Panel, agree and, if required, the Court may
approve):
· a
resolution to approve the Scheme is passed by a majority in number
of Scheme Shareholders present and voting (and entitled to vote) at
the Court Meeting, either in person or by proxy, representing 75
per cent. or more in value of each class of the Scheme Shares held
by those Scheme Shareholders;
· the
Resolutions necessary to implement the Scheme and the Acquisition
are passed by the requisite majority of Darktrace Shareholders at
the General Meeting;
·
following the Court Meeting and General Meeting and
satisfaction and/or waiver (where applicable) of the other
Conditions, the Scheme is sanctioned by the Court (without
modification, or with modification on terms agreed by the Bidco and
Darktrace); and
·
following such sanction, an office copy of the Court Order is
delivered to the Registrar of Companies.
The Conditions in paragraphs
1 and 2 of
Appendix 1 to this announcement provide
that the Scheme will lapse (under the authority of Rule 13.5(b) of
the Takeover Code) if:
· the
Court Meeting and the General Meeting are not held by the 22nd day
after the expected date of the Court Meeting and the General
Meeting to be set out in the Scheme Document in due course (or such
later date as may be agreed between Bidco and
Darktrace);
· the
Sanction Hearing to approve the Scheme is not held by the 22nd day
after the expected date of the Sanction Hearing to be set out in
the Scheme Document in due course (or such later date as may be
agreed between Bidco and Darktrace); or
· the
Scheme does not become Effective by 11.59 p.m. on the
Long Stop Date (or such later date as Bidco and Darktrace may, with
the consent of the Panel, agree and (if required) the Court may
allow).
If any Condition in paragraph
2 of Part A
of Appendix 1 to this
announcement is not capable of being satisfied by the date
specified therein, Bidco shall make an announcement through a
Regulatory Information Service as soon as practicable and, in any
event, by not later than 8.00 a.m. on the Business Day following
the date so specified, stating whether Bidco has invoked that
Condition, (where applicable) waived that Condition or, with the
agreement of Darktrace, specified a new date by which that
Condition must be satisfied.
Once the necessary approvals from Darktrace
Shareholders have been obtained and the other Conditions have been
satisfied or (where applicable) waived and the Scheme has been
approved by the Court, the Scheme will become Effective upon
delivery of a copy of the Court Order to the Registrar of
Companies. Subject to the satisfaction of the Conditions, the
Scheme is expected to become Effective during the third or fourth
quarter of 2024.
Upon the Scheme becoming Effective: (i) it will
be binding on all Scheme Shareholders, irrespective of whether or
not they attended or voted at the Court Meeting (and if they
attended and voted, whether or not they voted in favour); and (ii)
share certificates in respect of Scheme Shares will cease to be
valid and entitlements to Scheme Shares held within the CREST
system will be cancelled. In accordance with the applicable
provisions of the Takeover Code, the consideration for the transfer
of the Scheme Shares to Bidco will be despatched no later than 14
days after the Effective Date.
Any Scheme Shares issued before the Scheme
Record Time will be subject to the terms of the Scheme. The
Resolutions to be proposed at the General Meeting will, amongst
other matters, provide that the Articles be amended to incorporate
provisions requiring any Scheme Shares issued after the Scheme
Record Time (including in satisfaction of an option exercised under
the Darktrace Share Plans, and other than to Bidco and/or their
nominees) to be automatically transferred to Bidco on the same
terms as the Acquisition (other than terms as to timings and
formalities). The provisions of the Articles (as amended) will
avoid any person (other than Bidco and their nominees) holding
shares in the capital of Darktrace after the Effective
Date.
Further details of the Scheme, including
expected times and dates for each of the Court Meeting, the General
Meeting and the Sanction Hearing, together with notices of the
Court Meeting and the General Meeting, will be set out in the
Scheme Document. It is expected that the Scheme Document and the
Forms of Proxy accompanying the Scheme Document will be published
as soon as practicable and in any event within 28 days of this
announcement (or such later date as the Bidco and Darktrace may,
with the consent of the Panel, agree and, if required, the Court
may approve).
16
Delisting, and cancellation of trading and
re‑registration
It is intended that the London Stock Exchange
and the FCA will be requested respectively to cancel trading of
Darktrace Shares on the London Stock Exchange's Main Market and the
listing of Darktrace Shares from the Premium Segment of the
Official List on or shortly after the Effective Date.
It is expected that the last day of dealings in
Darktrace Shares on the Main Market of the London Stock Exchange
will be the Business Day immediately prior to the Effective Date
and no transfers will be registered after 6.00 p.m. (London time)
on that date.
It is intended that Darktrace will be
re-registered as a private limited company and for this to take
effect as soon as practicable on or following the Effective
Date.
17
Documents
Copies of the following documents will be
available promptly on Darktrace's website, subject to
certain restrictions relating to persons resident in
Restricted Jurisdictions, at
https://ir.darktrace.com
and in any event by no later than noon on the Business Day
following this announcement:
·
this announcement;
· the
Confidentiality Agreement;
· the
Cooperation Agreement;
· the
Panel Clean Team Agreement;
· the
irrevocable undertakings referred to in paragraph
8 above and summarised in
Appendix 3 to this announcement;
· the
documents entered into for the financing of the Acquisition
referred to in paragraph 9 above,
including the Interim Facility Agreement; and
· the
consents from financial advisers to being named in this
announcement.
Neither the content of the website referred to
in this announcement, nor any website accessible from
hyperlinks set out in this announcement, is
incorporated into or forms part of this announcement.
18
General
Bidco reserves the right to elect (with the
consent of the Panel and subject to the terms of the Cooperation
Agreement) to implement the acquisition of the Darktrace Shares by
way of an Offer as an alternative to the Scheme. In such event, the
Offer will be implemented on substantially the same terms, so far
as is applicable, as those which would apply to the
Scheme.
If the Acquisition is effected by way of an
Offer, and such an Offer becomes or is declared unconditional in
all respects and sufficient acceptances are received, Bidco intends
to: (i) make a request to the FCA to cancel the listing of the
Darktrace Shares from the Official List; (ii) make a
request to the London Stock Exchange to cancel the trading of
Darktrace Shares on its Main Market; and (iii) exercise its rights
to apply the provisions of Chapter 3 of Part 28 of the 2006 Act so
as to acquire compulsorily the remaining Darktrace Shares in
respect of which the Offer has not been accepted.
Investors should be aware that Bidco may
purchase Darktrace Shares otherwise than under the Scheme or any
Offer, including pursuant to privately negotiated
purchases.
The Acquisition will be on the terms and
subject to the conditions set out herein and in
Appendix 1, and to be set out in the Scheme
Document. The bases and sources for certain financial information
contained in this announcement are set out in
Appendix 2. Details of undertakings
received by Bidco are set out in
Appendix 3. Certain definitions and terms
used in this announcement are set out in
Appendix 4. The formal Scheme Document will
be sent to Darktrace Shareholders within 28 days of this
announcement (or on such later date as may be agreed with Darktrace
and the Panel).
Goldman Sachs (as financial adviser to Thoma
Bravo and Bidco) and Jefferies and Qatalyst Partners (as joint
financial advisers to Darktrace) have each given and not withdrawn
their consent to the publication of this announcement with the
inclusion herein of the references to their names in the form and
context in which they appear.
This announcement does not constitute an offer
or an invitation to purchase or subscribe for any
securities.
Enquiries
Thoma
Bravo
Megan Frank, Managing Director, Head of
Communications and Marketing
|
via FGS
Global
|
Goldman Sachs (Financial Adviser to Thoma
Bravo and Bidco)
|
+44 20 7774
1000
|
Mark Sorrell
Nicholas van den Arend
Chris Emmerson
Cara Pazdon
|
|
FGS
Global (PR Adviser to Thoma Bravo and Bidco)
Faeth Birch
Sophie Scott
Alastair Elwen
Amanda Healy
|
+44 207 251
3801
|
Darktrace
Via Headland
|
+44 (0)20 3805
4852
|
Jefferies (Joint Financial
Adviser and Corporate Broker to Darktrace)
Philip Yates
Dominic Lester
Nandan Shinkre
Paul Bundred
|
+44 20 7029
8000
|
Qatalyst
Partners (Joint Financial Adviser to
Darktrace)
Peter Spofforth
Jason DiLullo
|
+44 (0)20 3700
8820
|
Headland (PR Adviser to
Darktrace)
Nigel Prideaux
Henry Wallers
|
+44 (0)20 3805
4852
+44 (0)20 3805
4839
|
Kirkland & Ellis International LLP is
acting as legal adviser to Bidco and Thoma Bravo.
Latham & Watkins (London) LLP is acting as
legal adviser to Darktrace.
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.
Jefferies
International Limited ("Jefferies"), which is authorised and
regulated by the FCA in the United Kingdom, is acting exclusively
as financial adviser to Darktrace and no one else in connection
with the matters set out in this announcement and will not be
responsible to anyone other than Darktrace for providing the
protections afforded to clients of Jefferies nor for providing
advice in relation to the matters set out in this announcement.
Neither Jefferies 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 Jefferies in connection with
this announcement, any statement contained herein or
otherwise.
Qatalyst
Partners Limited ("Qatalyst
Partners"), which is authorised in the UK by the FCA, is
acting exclusively as financial adviser to Darktrace and no one
else in connection with the Acquisition and will not be acting for
any other person and will not be responsible to any person other
than Darktrace for providing the protections afforded to clients of
Qatalyst Partners or for advising any other person in respect of
the matters referred to in this announcement. No representation or
warranty, express or implied, is made by Qatalyst Partners as to
the contents of this announcement.
This
announcement is for information purposes only and is not intended
to, and does not, constitute, or form part of, an offer, invitation
or the solicitation of an offer 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, nor shall there be any sale,
issuance or transfer of securities of Darktrace in any jurisdiction
in contravention of applicable law. The Acquisition will be
implemented 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 vote in respect of the Scheme or other
response in relation to the Acquisition should be made only on the
basis of the information contained in the Scheme Document (or, if
the Acquisition is implemented by way of an Offer, the offer
document).
This
announcement contains inside information in relation to Darktrace
for the purposes of Article 7 of the Market Abuse Regulation. The
person responsible for arranging the release of this announcement
on behalf of Darktrace is James Sporle, General Counsel and Company
Secretary. Darktrace's Legal Entity Identifier is
213800PC5S5P9CSNFC89.
This
announcement does not constitute a prospectus, prospectus
equivalent document or exempted document.
If
you are in any doubt about the contents of this announcement or the
action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas Shareholders
The release,
publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and
therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves of, and
observe, any applicable legal or regulatory requirements. Any
failure to comply with such requirements 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.
This announcement has been prepared in accordance with and for the
purpose of complying with English law, the Takeover Code, the
Listing Rules, 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 Darktrace 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. Any person
(including, without limitation, nominees, trustees and custodians)
who would, or otherwise intends to, forward this announcement, the
Scheme Document or any accompanying document to any jurisdiction
outside the UK should refrain from doing so and seek appropriate
professional advice before taking any action. In particular, the
ability of persons who are not resident in the United Kingdom to
vote their Darktrace 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 (or, if the Acquisition is
implemented by way of an Offer, the offer
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, from, 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 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, without limitation, agents, 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, into, from, 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.
Further
details in relation to Overseas Shareholders will be included in
the Scheme Document (or, if the Acquisition is implemented by way
of an Offer, the offer document).
Notice to U.S. Darktrace
Shareholders
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 law. A transaction effected by means of a scheme of
arrangement is not subject to the tender offer or proxy
solicitation rules under the U.S. Securities Exchange Act of 1934
(the "U.S. Exchange Act").
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
U.S. 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 U.S. 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 U.S. laws and
regulations.
It may be
difficult for U.S. holders of Darktrace Shares to enforce their
rights and any claim arising out of the U.S. federal laws, since
Bidco and Darktrace are located in a non-U.S. jurisdiction, and
some or all of their officers and directors may be residents of a
non-U.S. jurisdiction. U.S. holders of Darktrace Shares may not be
able to sue a non-U.S. company or its officers or directors in a
non-U.S. court for violations of the U.S. securities laws. Further,
it may be difficult to compel a non-U.S. company and its affiliates
to subject themselves to a U.S. court's
judgement.
In accordance
with normal UK practice and pursuant to Rule 14e-5(b) of the U.S.
Exchange Act, Thoma Bravo or their nominees, or their brokers
(acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, Darktrace Shares outside of the
U.S., other than pursuant to the Acquisition, until the date on
which the Acquisition becomes Effective, lapses or is otherwise
withdrawn. Also, in accordance with Rule 14e-5(b) of the U.S.
Exchange Act, Goldman Sachs will continue to act as an exempt
principal trader in Darktrace shares on the London Stock Exchange.
These purchases may occur either in the open market at prevailing
prices or in private transactions at negotiated prices. Any
information about such purchases will be disclosed as required in
the United Kingdom, will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website,
www.londonstockexchange.com.
U.S.
Darktrace Shareholders also should be aware that the transaction
contemplated herein may have tax consequences in the U.S. and, that
such consequences, if any, are not described herein. U.S. Darktrace
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 Darktrace 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
Darktrace 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 Darktrace (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 "prepares", "plans", "expects" or
"does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal",
"estimates", "forecasts", "cost-saving", "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. Forward looking statements may include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of Bidco's, Darktrace's,
any member of the Bidco Group or any member of the Darktrace
Group's operations and potential synergies resulting from the
Acquisition; and (iii) the effects of global economic conditions
and governmental regulation on Bidco's, Darktrace's, any member of
the Bidco Group or any member of the Darktrace Group's
business.
Although
Bidco and Darktrace believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and Darktrace 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; changes in the global political,
economic, business and competitive environments and in market and
regulatory forces; changes in future exchange and interest rates;
changes in tax rates; future business combinations or disposals;
changes in general economic and business conditions; changes in the
behaviour of other market participants; changes in 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 Darktrace 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
Darktrace operate and changes in laws or in supervisory
expectations or requirements. Other unknown or unpredictable
factors could cause actual results to differ materially from those
expected, estimated or projected in the forward-looking statements.
If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual
results may differ materially from those expected, estimated or
projected. Such forward-looking statements should therefore be
construed in the light of such factors. Neither Bidco nor
Darktrace, 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.
Specifically,
statements of estimated cost savings and synergies related to
future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
savings and synergies referred to may not be achieved, may be
achieved later or sooner than estimated, or those achieved could be
materially different from those estimated. Due to the scale of the
Darktrace Group, there may be additional changes to the Darktrace
Group's operations. As a result, and given the fact that the
changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.
Other than in
accordance with their legal or regulatory obligations, neither
Bidco nor Darktrace is under any obligation, and Bidco and
Darktrace 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) of the Takeover Code applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) 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 (London time) 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 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
In accordance
with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the
Takeover Code will be made available, subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions, on Darktrace's website at https://ir.darktrace.com
by no later than 12 noon (London time) on the Business Day
following this announcement. For the avoidance of doubt, neither
the content of this website nor of any website accessible from
hyperlinks set out in this announcement is incorporated by
reference or forms part of this announcement.
No
profit forecasts, estimates or quantified benefits
statements
No statement
in this announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share for Darktrace for the current or
future financial years would necessarily match or exceed the
historical published earnings or earnings per share for
Darktrace.
Requesting hard copy
documents
In accordance
with Rule 30.3 of the Takeover Code, Darktrace Shareholders,
persons with information rights and participants in Darktrace Share
Plans may request a hard copy of this announcement, free of charge,
by contacting Darktrace's registrar, Equiniti Limited,
either in writing to Aspect House, Spencer Road, Lancing, West
Sussex, BN99 6DA, United Kingdom or by calling +44 (0) 333 207
6530. You may also request that all future documents, announcements
and information to be sent to you in relation to the Acquisition
should be in hard copy form. Calls outside the U.K. will be charged
at the applicable international rate. Lines are open between 8.30
a.m. and 5.30 p.m. (London time) Monday to Friday excluding public
holidays in England and Wales. For persons who receive a copy of this
announcement in electronic form or via a website notification, a
hard copy of this announcement will not be sent unless so
requested. In accordance with Rule 30.3 of the Takeover Code, such
persons may also request that all future documents, announcements
and information to be sent to them in relation to the Acquisition
should be in hard copy form.
Electronic
Communications
Please be
aware that addresses, electronic addresses and certain other
information provided by Darktrace Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Darktrace may be provided to Bidco during the
offer period as required under Section 4 of Appendix 4 of the
Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Rounding
Certain
figures included in this announcement have been subjected to
rounding adjustments. Accordingly, figures shown for the same
category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an arithmetic
aggregation of figures that precede them.
General
Bidco
reserves the right to elect, with the consent of the Panel (where
necessary) and subject to the terms of the Cooperation Agreement,
to implement the Acquisition by way of an Offer as an alternative
to the Scheme. In such an event, an Offer will be implemented on
substantially the same terms, so far as applicable, as those which
would apply to the Scheme (subject to appropriate
amendments).
If the
Acquisition is effected by way of an Offer, and such an Offer
becomes or is declared unconditional in all respects and sufficient
acceptances are received, Bidco intends to exercise its rights to
apply the provisions of Chapter 3 of Part 28 of the 2006 Act so as
to acquire compulsorily the remaining Darktrace Shares in respect
of which the Offer has not been accepted.
Investors
should be aware that Bidco may purchase Darktrace Shares otherwise
than under any Offer or the Scheme, including pursuant to privately
negotiated purchases.
Rule 2.9 of the Takeover
Code
For the
purposes of Rule 2.9 of the Takeover Code, Darktrace confirms that,
as at 26 April 2024 2024, it had in issue 703,683,540 ordinary
shares of 1 pence each admitted to trading on the Main Market of
the London Stock Exchange, and 3,323,886 Treasury Shares. The ISIN
for the shares is GB00BNYK8G86.
Disclaimer
The
information contained herein does not constitute an offer to sell,
nor a solicitation of an offer to buy, any security, and may not be
used or relied upon in connection with any offer or solicitation.
Any offer or solicitation in respect of Thoma Bravo and Thoma Bravo
Funds will be made only through a confidential private placement
memorandum and related documents which will be furnished to
qualified investors on a confidential basis in accordance with
applicable laws and regulations. The information contained herein
is not for publication or distribution to persons in the U.S. Any
securities referred to herein have not been and will not be
registered under the U.S. Securities Act of 1933, as amended, and
may not be offered or sold without registration thereunder or
pursuant to an available exemption therefrom. Any offering of
securities to be made in the U.S. would have to be made by means of
an offering document that would be obtainable from the issuer or
its agents and would contain detailed information about the issuer
of the securities and its management, as well as financial
information. The securities may not be offered or sold in the U.S.
absent registration or an exemption from
registration.
The
Acquisition will be subject to English law, the jurisdiction of the
Court, and the applicable requirements of the Takeover Code, the
Panel, the London Stock Exchange, the FCA, the Listing Rules and
the Registrar of Companies.
Appendix 1
Conditions and Further Terms of the Transaction
Part A
Conditions to the Scheme and Acquisition
1.
The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming Effective, subject to the provisions of
the Takeover Code, by no later than 11.59 p.m. on the Long Stop
Date.
Conditions of the Scheme
2.
The Scheme will be subject to the following
Conditions:
2.1
(i) its approval by a majority in number of the Scheme
Shareholders who are on the register of members of Darktrace (or
the relevant class or classes thereof) at the Voting Record Time,
present and voting, whether in person or by proxy, at the Court
Meeting and at any separate class meeting which may be required (or
any adjournment thereof) and who represent not less than
75 per cent. in value of Scheme Shares held by Scheme
Shareholders; and (ii) such Court Meeting (and any separate
class meeting which may be required) being held on or before the
22nd day after the expected date of the Court Meeting to be set out
in the Scheme Document in due course (or such later date as may be
agreed between Bidco and Darktrace with the consent of the Panel
(and that the Court may approve if required));
2.2
(i) the Resolutions being duly passed at the General
Meeting (or any adjournment thereof); and (ii) such General
Meeting being held on or before the 22nd day after the expected
date of the General Meeting to be set out in the Scheme Document in
due course (or such later date as may be agreed between Bidco and
Darktrace with the consent of the Panel (and that the Court may
approve if required)); and
2.3 (i) the
sanction of the Scheme by the Court (with or without modification
(but subject to such modification being acceptable to Bidco and
Darktrace)); and (ii) the Sanction Hearing being held on or before
the 22nd day after the expected date of the Sanction Hearing to be
set out in the Scheme Document in due course (or such later date as
may be agreed between Bidco and Darktrace with the consent of the
Panel (and that the Court may approve if required)); and
2.4 the
delivery of a copy of the Court Order to the Registrar of
Companies.
General Conditions
3.
In addition, subject as stated in Part B of this
Appendix 1, Bidco and Darktrace have agreed that the
Acquisition will be conditional upon the following Conditions and,
accordingly, the necessary actions to make the Scheme Effective
will not be taken unless the following Conditions (as amended if
appropriate) have been satisfied or, where relevant,
waived:
Antitrust approvals
Australia
3.1 the
ACCC:
3.1.1 not having
notified Bidco that it objects to or proposes to take any steps to
oppose the Acquisition under section 50 of the Australian
Competition and Consumer Act 2010 (Cth); or
3.1.2 having given
notice in writing stating, or stating to the effect, that it does
not propose to intervene in or seek to prevent the Acquisition
under section 50 of the Australian Competition and Consumer Act
2010 (Cth), on terms satisfactory to Bidco, and that notice has not
been withdrawn, revoked or adversely amended;
Austria
3.2 (i)
expiry of the statutory waiting period pursuant to a the Austrian
Cartel Act (Kartellgesetz); or (ii) the waiver by
the Federal Competition Authority (Bundeswettbewerbsbehörde) and the
Federal Cartel Attorney (Bundeskartellanwalt), pursuant to the
Austrian Cartel Act (Kartellgesetz) of their right to
request an in-depth investigation of the Acquisition by the Cartel
Court; or
3.3 (i) a
legally binding decision by the Cartel Court (Kartellgericht) to terminate an
in-depth investigation of the Acquisition, pursuant to the Austrian
Cartel Act (Kartellgesetz); or (ii) a legally
binding decision by the Cartel Court (Kartellgericht) or the Appellate
Cartel Court (Kartellobergericht), pursuant to the
Austrian Cartel Act (Kartellgesetz), not to prohibit the
Acquisition or finding that the Acquisition does not qualify as a
notifiable concentration;
South
Africa
3.4 written
approval having been obtained from the South African Competition
Commission or the South African Competition Tribunal, or the
Acquisition having been deemed approved in terms of the South
African Competition Act, No. 89 of 1998 (as amended);
United
Kingdom
3.5 in so far
as the Acquisition satisfies the thresholds for notification and
premerger authorisation under the United Kingdom Enterprise Act
2002, either:
3.5.1 (i) the CMA
having indicated, in terms satisfactory to Bidco acting reasonably,
and in response to a briefing paper submitted by Bidco, that it has
no further questions or that it does not intend to open a CMA
Merger Investigation in relation to the Acquisition or any matters
arising therefrom; or (ii) if the CMA opens such an investigation,
confirmation having been received in writing from the CMA, in terms
satisfactory to Bidco acting reasonably, that the CMA does not
intend to make a CMA Phase 2 Reference in connection with the
Acquisition or any matters arising there from; or
3.5.2 the period
within which the CMA is required to decide whether the duty to make
a CMA Phase 2 Reference applies with respect to the Acquisition or
any matters arising therefrom has expired without such a decision
having been made;
United
States
3.6 all
applicable filings having been made under the HSR Act and all
waiting periods under the HSR Act applicable to Acquisition, and
any extensions thereto (including pursuant to an agreement with a
United States governmental authority), having expired, lapsed or
been terminated;
Regulatory
approvals
3.7 the
receipt of any required foreign investment approvals, on terms
reasonably satisfactory to Bidco, by the competent authorities (or
confirmation, on terms satisfactory to Bidco, that the Acquisition
does not fall within the scope thereof) in:
3.7.1 Australia,
the Treasurer of the Commonwealth of Australia (or his or her
delegate):
(a)
provides written notice under the Australian Foreign
Acquisitions and Takeovers Act 1975 (Cth) (FATA) that there are no
objections to the acquisition contemplated by this Agreement,
either on an unconditional basis or subject only to such conditions
acceptable to Bidco, acting reasonably; or
(b)
becomes precluded by passage of time from making any order or
decision under Division 2 of Part 3 of the FATA in respect of the
acquisition contemplated by this Agreement,
whichever first occurs;
3.7.2 France,
pursuant to the foreign investment regime under Articles L.151-1 et
seq. and R. 151-1 et seq. of the French Monetary and Financial Code
(Code monétaire et
financier);
3.7.3 Italy, any
action, decision or omission of the Italian Prime Minister office
as a result of which consummation of the Acquisition shall have
been, or deemed to have been, approved, cleared or otherwise
permitted pursuant to the applicable provisions of Law Decree
21/2012 ("Golden Power
Law"), as subsequently amended and integrated, including (i)
the expiry of any applicable waiting period or extension thereof,
(ii) having resolved not to perform the special powers contemplated
by the Golden Power Law, (iii) issuing a decision accompanied by
conditions; or (iv) having declined jurisdiction over the
Acquisition considering that the Acquisition does not fall within
the scope of Golden Power Law.
3.7.4 the
Netherlands, all filings, applications, registrations and
notifications (and similar actions) with the Dutch Investment
Screening Authority (Bureau
Toetsing Investeringen) (the "BTI") which are required in connection
with the Acquisition having been made, and (ii) all consents,
approvals, authorisations, clearances and waivers which are
required from BTI for the consummation of the Acquisition having
been granted or being deemed to have been granted, whether by means
of the expiry of any applicable waiting period or
otherwise;
3.7.5 Sweden,
having (i) given their approval to the consummation of the
Acquisition (with or without conditions) or waived such approval;
or (ii) the applicable waiting periods for such approval having
expired without any decision having been taken by the Swedish
Inspectorate of Strategic Products;
3.7.6 the United
Kingdom, following the notification of the Acquisition in
accordance with the requirements of the UK National Security and
Investment Act 2021 (the "NSI
Act"), either:
(a) the
Secretary of State notifies Bidco (before the expiry of the
relevant assessment period within which the Secretary of State may
give a call-in notice under the NSI Act) that no further action
will be taken in relation to the Acquisition; or
(b) in
the event that a call-in notice is given in relation to the
Acquisition, the Secretary of State either:
(i)
gives a final notification pursuant to section 26(1)(b) of
the NSI Act confirming that no further action will be taken in
relation to the Acquisition under the NSI Act; or
(ii)
makes a final order pursuant to section 26(1)(a) of the NSI
Act permitting the Acquisition to proceed subject to remedies or
requirements;
Third Party clearances
3.8 other
than in relation to the matters referred to in Conditions
3.1 to 3.7, no central
bank, government or governmental, quasi‑governmental,
supranational, statutory, regulatory, environmental,
administrative, fiscal or investigative body, court, trade agency,
association, institution, environmental body, employee
representative body or any other body or person whatsoever in any
jurisdiction (each a "Third
Party") having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or having required any action
to be taken or otherwise having done anything or having enacted,
made or proposed any statute, regulation, decision, order or change
to published practice and there not continuing to be outstanding
any statute, regulation, decision or order which would or
might:
3.8.1 make the
Acquisition, its implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control or
management of, any member of the Wider Darktrace Group by any
member of the Bidco Group void, illegal and/or unenforceable under
the laws of any relevant jurisdiction, or otherwise directly or
indirectly prevent, prohibit, or restrain, restrict, impede,
challenge, delay or otherwise interfere with the implementation of,
or impose material additional conditions or obligations with
respect to, the Acquisition or require amendment of the
Scheme;
3.8.2 require,
prevent or materially delay the divestiture or alter the terms
envisaged for such divestiture by any member of the Wider Bidco
Group or by any member of the Wider Darktrace Group of all or any
part of their businesses, assets or property or impose any
limitation on the ability of all or any of them to conduct their
businesses (or any part thereof) or to own, control or manage any
of their assets or properties (or any part thereof) to an extent
which is material in the context of the Wider Darktrace Group taken
as a whole or in the context of the Acquisition;
3.8.3 impose any
material limitation on, or result in a material delay in, the
ability of any member of the Wider Bidco Group directly or
indirectly to acquire or hold or to exercise effectively all or any
rights of ownership in respect of shares or other securities in
Darktrace (or any member of the Wider Darktrace Group) or on the
ability of any member of the Wider Darktrace Group or any member of
the Wider Bidco Group directly or indirectly to hold or exercise
effectively any rights of ownership in respect of shares or other
securities (or the equivalent) in, or to exercise management
control over, any member of the Wider Darktrace Group to an extent
which is material in the context of the Wider Darktrace Group taken
as a whole or in the context of the Acquisition;
3.8.4 other than
pursuant to the implementation of the Scheme or, if applicable,
sections 974 to 991 of the 2006 Act, require any member of the
Wider Bidco Group or the Wider Darktrace Group to acquire or offer
to acquire any shares, other securities (or the equivalent) or
interest in any member of the Wider Darktrace Group or any asset
owned by any third party which is material in the context of the
Wider Darktrace Group or the Wider Bidco Group, in either case,
taken as a whole;
3.8.5 require,
prevent or delay a divestiture by any member of the Wider Bidco
Group of any shares or other securities (or the equivalent) in any
member of the Wider Darktrace Group;
3.8.6 result in any
member of the Wider Darktrace Group ceasing to be able to carry on
business under any name under which it presently carries on
business to an extent which is material in the context of the Wider
Darktrace Group taken as a whole or in the context of the
Acquisition;
3.8.7 impose any
limitation on the ability of any member of the Wider Bidco Group or
any member of the Wider Darktrace Group to conduct, integrate or
co‑ordinate all or any part of their respective businesses with all
or any part of the business of any other member of the Wider Bidco
Group and/or the Wider Darktrace Group in a manner which is adverse
and material to the Wider Bidco Group and/or the Wider Darktrace
Group, in either case, taken as a whole or in the context of the
Acquisition; or
3.8.8 except as
Disclosed, otherwise affect the business, assets, value, profits,
prospects or operational performance of any member of the Wider
Darktrace Group or any member of the Wider Bidco Group in each case
in a manner which is adverse to and material in the context of the
Wider Darktrace Group taken as a whole or of the financing of the
Acquisition;
and all applicable waiting and other time
periods (including any extensions thereof) during which any such
Third Party could decide to take, institute, implement or threaten
any such action, proceeding, suit, investigation, enquiry or
reference or take any other step under the laws of any jurisdiction
in respect of the Acquisition or proposed acquisition of any
Darktrace Shares or otherwise intervene having expired, lapsed, or
been terminated;
3.9 to the
extent not already covered by Conditions 3.1
to 3.7, all other notifications,
filings or applications which are necessary under any applicable
legislation or regulation or reasonably considered to be
appropriate in any relevant jurisdiction having been made in
connection with the Acquisition and all necessary waiting and other
time periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having
expired, lapsed or been terminated (as appropriate) and all
statutory and regulatory obligations in any jurisdiction having
been complied with and all Authorisations which are deemed to be
reasonably necessary or appropriate by Bidco in any jurisdiction
for or in respect of the Scheme and the Acquisition or the proposed
acquisition of any shares or other securities in, or control of,
Darktrace by any member of the Wider Bidco Group having been
obtained on terms and in a form reasonably satisfactory to Bidco
(acting reasonably) from all appropriate Third Parties or (without
prejudice to the generality of the foregoing) from any person or
bodies with whom any member of the Wider Darktrace Group or the
Wider Bidco Group has entered into contractual arrangements in each
case where the direct consequence of a failure to make such
notification or filing or to wait for the expiry, lapse or
termination of any such waiting or other time period or to comply
with such obligation or obtain such Authorisation would be unlawful
in any relevant jurisdiction or have a material adverse effect on
the Wider Darktrace Group, any member of the Wider Bidco Group or
the ability of Bidco to implement the Scheme and all such
Authorisations remaining in full force and effect at the time at
which the Scheme becomes otherwise unconditional in all respects
and there being no notice or intimation of an intention to revoke,
suspend, restrict, modify or not to renew such
Authorisations;
3.10
no temporary restraining order, preliminary or permanent
injunction, preliminary or permanent enjoinment, or other law or
order issued and being in effect by a court or other Third Party
which has the effect of making the Acquisition or any acquisition
or proposed acquisition of any shares or other securities or
control or management of, any member of the Wider Darktrace Group
by any member of the Wider Bidco Group, or the implementation of
either of them, void, voidable, illegal and/or unenforceable under
the laws of any relevant jurisdiction, or otherwise directly or
indirectly prohibiting, preventing, restraining restricting,
delaying or otherwise interfering with the completion or the
approval of the Acquisition or any matter arising from the proposed
acquisition of any shares or other securities in, or control or
management of, any member of the Wider Darktrace Group by any
member of the Wider Bidco Group;
Confirmation of absence of adverse
circumstances
3.11
except as Disclosed, there being no provision of any
arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider Darktrace Group is a
party or by or to which any such member or any of its assets is or
may be bound, entitled or be subject or any event or circumstance
which, as a consequence of the Acquisition or the proposed
acquisition by any member of the Wider Bidco Group of any shares or
other securities in Darktrace or because of a change in the control
or management of any member of the Wider Darktrace Group or
otherwise, would or might reasonably be expected to result in, in
each case, to an extent which is material in the context of the
Wider Darktrace Group taken as a whole or in the context of the
Acquisition:
3.11.1
any monies borrowed by, or any other indebtedness, actual or
contingent of, or any grant available to, any member of the Wider
Darktrace Group being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
3.11.2
the rights, liabilities, obligations, interests or business
of any member of the Wider Darktrace Group or any member of the
Wider Bidco Group under any such arrangement, agreement, licence,
permit, lease or instrument or the interests or business of any
member of the Wider Darktrace Group or any member of the Wider
Bidco Group in or with any other firm or company or body or person
(or any agreement or arrangement relating to any such business or
interests) being or becoming capable of being terminated or
adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken or arising
thereunder;
3.11.3
any member of the Wider Darktrace Group ceasing to be able to
carry on business under any name under which it presently carries
on business to an extent which is material in the context of the
Darktrace Group taken as a whole or in the context of the
Acquisition;
3.11.4
any assets or interests of, or any asset the use of which is
enjoyed by, any member of the Wider Darktrace Group being or
falling to be disposed of or charged or any right arising under
which any such asset or interest could be required to be disposed
of or charged or could cease to be available to any member of the
Wider Darktrace Group otherwise than in the ordinary course of
business;
3.11.5
other than in the ordinary course of business, the creation
or enforcement of any mortgage, charge or other security interest
over the whole or any part of the business, property or assets of
any member of the Wider Darktrace Group or any such mortgage,
charge or other security interest (whenever created, arising or
having arisen), becoming enforceable;
3.11.6
the business, assets, value, financial or trading position,
profits, prospects or operational performance of any member of the
Wider Darktrace Group being prejudiced or adversely
affected;
3.11.7
the creation or acceleration of any material liability
(actual or contingent) by any member of the Wider Darktrace Group
other than trade creditors or other liabilities incurred in the
ordinary course of business; or
3.11.8
any liability of any member of the Wider Darktrace Group to
make any severance, termination, bonus or other payment to any of
its directors or other officers other than in the ordinary course
of business;
No material transactions, claims or changes in
the conduct of the business of the Darktrace Group
3.12
except as Disclosed, no member of the Wider Darktrace Group
having since 30 June 2023:
3.12.1
save as between Darktrace and its wholly‑owned subsidiaries
or between such wholly‑owned subsidiaries and save for the issue or
transfer out of treasury of Darktrace Shares on the exercise of
options or vesting of awards granted in the ordinary course under
the Darktrace Share Plans, issued or agreed to issue or authorised
or proposed or announced its intention to authorise or propose the
issue of additional shares of any class, or securities or
securities convertible into, or exchangeable for, or rights,
warrants or options to subscribe for or acquire, any such shares or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of Darktrace
Shares out of treasury;
3.12.2
recommended, declared, paid or made or agreed to recommend,
declare, pay or make any bonus issue, dividend or other
distribution (whether payable in cash or otherwise) other than to
Darktrace or one of its wholly‑owned subsidiaries;
3.12.3
save as between Darktrace and its wholly‑owned subsidiaries
or between such wholly‑owned subsidiaries, merged with (by
statutory merger or otherwise) or demerged from or acquired any
body corporate, partnership or business or acquired or disposed of,
or, other than in the ordinary course of business, transferred,
mortgaged or charged or created any security interest over, any
assets or any right, title or interest in any asset (including
shares and trade investments) or authorised, proposed or announced
any intention to do so, in each case to an extent which is material
in the context of the Wider Darktrace Group taken as a
whole;
3.12.4
save as between Darktrace and its wholly‑owned subsidiaries
or between such wholly‑owned subsidiaries, made, authorised,
proposed or announced an intention to propose any change in its
loan capital other than in the ordinary course of business and to
an extent which is material in the context of the Wider Darktrace
Group taken as a whole;
3.12.5
issued, authorised or proposed or announced an intention to
authorise or propose the issue of, or made any change in or to the
terms of, any debentures or (save in the ordinary course of
business and save as between Darktrace and its wholly‑owned
subsidiaries or between such wholly‑owned subsidiaries) incurred or
increased any indebtedness or become subject to any contingent
liability to an extent which is material in the context of the
Wider Darktrace Group taken as a whole or in the context of the
Acquisition;
3.12.6
entered into, varied, authorised or proposed entry into or
variation of, or announced its intention to enter into or vary, any
contract, transaction, arrangement or commitment (whether in
respect of capital expenditure or otherwise) (otherwise than in the
ordinary course of business) which is of a long-term, unusual or
onerous nature, or which involves or could reasonably be expected
to involve an obligation of a nature or magnitude which is
materially restrictive on the business of any member of the Wider
Darktrace Group to an extent which is or is reasonably likely to be
material to the Wider Darktrace Group taken as a whole;
3.12.7
entered into any licence or other disposal of intellectual
property rights of any member of the Wider Darktrace Group which
are material in the context of the Wider Darktrace Group taken as a
whole and outside the normal course of business;
3.12.8
entered into, varied, authorised or announced its intention
to enter into or vary the terms of or made any offer (which remains
open for acceptance) to enter into or vary the terms of, any
contract, commitment, arrangement or any service agreement with any
director or senior executive of the Wider Darktrace Group save for
salary increases, bonuses or variations of terms in the ordinary
course of business, which is material in the context of the Wider
Darktrace Group taken as a whole;
3.12.9
proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme, or other benefit relating to
the employment or termination of employment of any employee of the
Wider Darktrace Group which, taken as a whole, are material in the
context of the Wider Darktrace Group taken as a whole;
3.12.10 (i)
(excluding the trustee of any pension scheme(s) established by a
member of the Wider Darktrace Group other than Darktrace itself)
made, agreed or consented to or procured any material change to:
(a) the terms of any existing trust deeds, rules, policy or
other governing documents, or entered into or established any new
trust deeds, rules, policy or other governing documents,
constituting any pension scheme or other retirement or death
benefit arrangement established for the directors, former
directors, employees or former employees of any entity in the Wider
Darktrace Group or their dependants and established by a member of
the Wider Darktrace Group (a "Relevant Pension Plan"); (b) the
basis on which benefits accrue, pensions which are payable or the
persons entitled to accrue or be paid benefits, under any Relevant
Pension Plan; (c) the basis on which the liabilities of any
Relevant Pension Plan are funded or valued; or (d) the basis
or rate of employer contribution to a Relevant Pension Plan, in
each case to the extent which is material in the context of the
Wider Darktrace Group taken as a whole or in the context of the
Acquisition and other than as required in accordance with
applicable law; (ii) enter into or propose to enter into one
or more bulk annuity contracts in relation to any Relevant Pension
Plan; or (iii) carried out any act: (a) which would or
could reasonably be expected to lead to the commencement of the
winding up of any Relevant Pension Plan; (b) which would or is
reasonably likely to create a material debt owed by an employer to
any Relevant Pension Plan; (c) which would or might accelerate any
obligation on any employer to fund or pay additional contributions
to any Relevant Pension Plan; or (d) which would, having regard to
the published guidance of the Pensions Regulator give rise directly
or indirectly to a liability in respect of a Relevant Pension Plan
arising out of the operation of sections 38 and 38A of the Pensions
Act 2004 in relation to a Relevant Pension Plan, in each case to
the extent which is material in the context of the Wider Darktrace
Group taken as a whole or in the context of the Acquisition and
other than as required in accordance with applicable
law;
3.12.11 entered
into, implemented or effected, or authorised, or announced its
intention to implement or effect, any joint venture, asset or
profit sharing arrangement, partnership, composition, assignment,
reconstruction, amalgamation, commitment, scheme or other
transaction or arrangement (other than the Scheme) otherwise than
in the ordinary course of business which is material in the context
of the Wider Darktrace Group taken as a whole or in the context of
the Acquisition;
3.12.12
purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, save in respect of the matters mentioned in
sub‑paragraph 3.12.1 above, made any other change to any part
of its share capital to an extent which (other than in the case of
Darktrace) is material in the context of the Wider Darktrace Group
taken as a whole (except, in each case, where relevant, as between
Darktrace and wholly-owned subsidiaries of Darktrace or between the
wholly-owned subsidiaries of Darktrace);
3.12.13 other
than with respect to claims between Darktrace and its wholly-owned
subsidiaries (or between such subsidiaries), waived, compromised or
settled any claim otherwise than in the ordinary course of business
which is material in the context of the Wider Darktrace Group taken
as a whole or in the context of the Acquisition;
3.12.14 made any
alteration to its articles of association or other constitutional
documents (in each case, other than in connection with the Scheme)
which is material in the context of the Acquisition;
3.12.15 (other
than in respect of a member of the Wider Darktrace Group which is
dormant and was solvent at the relevant time) taken or proposed any
steps, corporate action or had any legal proceedings instituted or
threatened against it in relation to the suspension of payments, a
moratorium of any indebtedness, its winding‑up (voluntary or
otherwise), dissolution, reorganisation or for the appointment of
any administrator, receiver, manager, administrative receiver,
trustee or similar officer of all or any of its assets or revenues
or any analogous proceedings in any jurisdiction or appointed any
analogous person in any jurisdiction or had any such person
appointed which is material in the context of the Wider Darktrace
Group taken as a whole or in the context of the
Acquisition;
3.12.16 been
unable, or admitted in writing that it is unable, to pay its debts
or commenced negotiations with one or more of its creditors with a
view to rescheduling or restructuring any of its indebtedness, or
having stopped or suspended (or threatened to stop or suspend)
payment of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business which is
material in the context of the Wider Darktrace Group taken as a
whole or in the context of the Acquisition;
3.12.17 entered
into any contract, commitment, agreement or arrangement otherwise
than in the ordinary course of business or passed any resolution or
made any offer (which remains open for acceptance) with respect to
or announced an intention to, or to propose to, effect any of the
transactions, matters or events referred to in this
Condition;
3.12.18
terminated or varied the terms of any agreement or
arrangement between any member of the Wider Darktrace Group and any
other person in a manner which would or might be expected to have a
material adverse effect on the financial position of the Wider
Darktrace Group taken as a whole; or
3.12.19 taken (or
agreed or proposed to take) any action which requires, or would
require, the consent of the Panel or the approval of Darktrace
Shareholders in general meeting in accordance with, or as
contemplated by, Rule 21.1 of the Takeover Code;
No material adverse change
3.13
since 30 June 2023, and except as Disclosed, there having
been:
3.13.1
no adverse change and no circumstance having arisen which
would be expected to result in any adverse change or deterioration
in the business, assets, value, financial or trading position,
profits, prospects or operational performance of any member of the
Wider Darktrace Group to an extent which is material to the Wider
Darktrace Group taken as a whole or in the context of the
Acquisition;
3.13.2
no litigation, arbitration proceedings, prosecution or other
legal proceedings including, without limitation, with regard to
intellectual property rights used by the Wider Darktrace Group
having been threatened, announced or instituted by or against or
remaining outstanding against any member of the Wider Darktrace
Group or to which any member of the Wider Darktrace Group is or may
become a party (whether as claimant or defendant or otherwise)
which, in any such case, might reasonably be expected to have a
material adverse effect on the Wider Darktrace Group taken as a
whole, and no enquiry, review, investigation or enforcement
proceedings by, or complaint or reference to, any Third Party
against or in respect of any member of the Wider Darktrace Group
having been threatened, announced or instituted by or against, or
remaining outstanding in respect of, any member of the Wider
Darktrace Group which, in any such case, might reasonably be
expected to have a material adverse effect on the Wider Darktrace
Group taken as a whole;
3.13.3
no contingent or other liability having arisen, increased or
become apparent which is reasonably likely to adversely affect the
business, assets, financial or trading position, profits, prospects
or operational performance of any member of the Wider Darktrace
Group to an extent which is material to the Wider Darktrace Group
taken as a whole;
3.13.4
no steps having been taken and no omissions having been made
which are reasonably likely to result in the withdrawal,
cancellation, termination or modification of any licence held by
any member of the Wider Darktrace Group, which is necessary for the
proper carrying on of its business and the withdrawal,
cancellation, termination or modification of which is material and
reasonably be expected to have a material adverse effect on the
Wider Darktrace Group taken as a whole; and
3.13.5
no member of the Wider Darktrace Group having conducted its
business in material breach of any applicable laws and regulations
which in any case is material in the context of the Wider Darktrace
Group taken as a whole;
3.14
since 30 June 2023, except as Disclosed, Bidco not having
discovered:
3.14.1
that any financial, business or other information concerning
the Wider Darktrace Group publicly announced or disclosed to any
member of the Wider Bidco Group at any time after 30 June 2023
prior to the date of this announcement by or on behalf of any
member of the Wider Darktrace Group or to any of their advisers is
misleading, contains a misrepresentation of fact or omits to state
a fact necessary to make that information not misleading and which
is, in any case, material in the context of the Wider Darktrace
Group taken as a whole or in the context of the Acquisition;
or
3.14.2
that any member of the Wider Darktrace Group is subject to
any liability, contingent or otherwise and which is material in the
context of the Wider Darktrace Group taken as a whole;
Environmental liabilities
3.15
except as Disclosed, Bidco not having discovered that, in
relation to any release, emission, accumulation, discharge,
disposal or other similar circumstance which has impaired or is
likely to impair the environment (including property) or harmed or
is likely to harm the health of humans, animals or other living
organisms or eco‑systems, no past or present member of the Wider
Darktrace Group, in a manner or to an extent which is material in
the context of the Wider Darktrace Group, (i) having committed
any violation of any applicable laws, statutes, regulations,
Authorisations, notices or other requirements of any Third Party
giving rise to a material liability; and/or (ii) having
incurred any material liability (whether actual or contingent) to
any Third Party; and/or (iii) being likely to incur any
material liability (whether actual or contingent), or being
required, to make good, remediate, repair, re‑instate or clean up
the environment (including any property), in each case of (i), (ii)
or (iii), which such liability or requirement would be material to
the Wider Darktrace Group taken as a whole;
Intellectual Property
3.16
no circumstance having arisen or event having occurred in
relation to any intellectual property owned or used by any member
of the Wider Darktrace Group which would be reasonably expected to
have a material adverse effect on the Wider Darktrace Group taken
as a whole or is otherwise material in the context of the
Acquisition, including:
3.16.1
any member of the Wider Darktrace Group losing its title to
any intellectual property material to its business, or any
intellectual property owned by the Wider Darktrace Group and
material to its business being revoked, cancelled or declared
invalid;
3.16.2
any claim being asserted in writing or threatened in writing
by any person challenging the ownership of any member of the Wider
Darktrace Group to, or the validity or effectiveness of, any of its
intellectual property; or
3.16.3
any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider Darktrace Group being
terminated or varied;
Anti‑corruption and sanctions
3.17
except as Disclosed, Bidco not having discovered that (to an
extent that is material in the context of the Wider Darktrace Group
taken as a whole):
3.17.1
any past or present member of the Wider Darktrace Group or
any person that performs or has performed services for or on behalf
of any such company is or has at any time engaged in any activity,
practice or conduct (or omitted to take any action) in
contravention of the UK Bribery Act 2010, the U.S. Foreign
Corrupt Practices Act of 1977 (so far as is applicable), as amended
or any other applicable anti‑corruption legislation;
3.17.2
any member of the Wider Darktrace Group is ineligible to be
awarded any contract or business under section 23 of the
Public Contracts Regulations 2006 or section 26 of the
Utilities Contracts Regulations 2006 (each as
amended);
3.17.3
any past or present member of the Wider Darktrace Group has
engaged in any activity or business with, or made any investments
in, or made any payments to any government, entity or individual
covered by any of the economic sanctions administered by the United
Nations or the European Union (or any of their respective member
states) or the United States Office of Foreign Assets Control or
any other governmental or supranational body or authority in any
jurisdiction (so far as is applicable); or
3.17.4
a member of the Darktrace Group has engaged in a transaction
which would cause the Wider Bidco Group to be in breach of any law
or regulation on completion of the Acquisition, including the
economic sanctions administered by the United States Office of
Foreign Assets Control or HM Treasury & Customs or any
government, entity or individual targeted by any of the economic
sanctions of the United Nations, United States or the European
Union or any of its member states; or
No criminal property
3.18
except as Disclosed, Bidco not having discovered that any
asset of any member of the Wider Darktrace Group constitutes
criminal property as defined by section 340(3) of the Proceeds
of Crime Act 2002 (but disregarding paragraph (b) of that
definition).
Part B
Further terms of the Acquisition
1.
Subject to the requirements of the Panel, Bidco reserves the
right in its sole discretion to waive, in whole or in part, all or
any of the Conditions set out in Part A of Appendix 1,
except Conditions 1, 2.1(i), 2.2(i), 2.3(i) and
2.4 which cannot be waived. If any of Conditions
2.1(ii), 2.2(ii) or 2.3(ii) is not satisfied by the relevant
deadline specified in the relevant Condition, Bidco shall make an
announcement by 8.00 a.m. on the Business Day following such
deadline confirming whether it has invoked the relevant Condition,
waived the relevant deadlines or agreed with Darktrace to extend
the relevant deadline.
2.
Bidco shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of the Conditions in Part A of Appendix 1
above that are capable of waiver by a date earlier than the latest
date for the fulfilment of that Condition notwithstanding that the
other Conditions of the Acquisition may at such earlier date have
been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be
capable of fulfilment.
3.
Under Rule 13.5(a) of the Takeover Code and subject to
paragraph 4, Bidco may only invoke a Condition so as to cause the
Acquisition not to proceed, to lapse or to be withdrawn with the
consent of the Panel. The Panel will normally only give its consent
if the circumstances which give rise to the right to invoke the
Condition are of material significance to Bidco in the context of
the Acquisition. This will be judged by reference to the facts of
each case at the time that the relevant circumstances
arise.
4.
Condition 1, Conditions 2.1(i), 2.2(i), 2.3(i) and
2.4 in Part A of Appendix 1 above,
and, if applicable, any acceptance condition if the Acquisition is
implemented by means of an Offer, are not subject to Rule 13.5(a)
of the Takeover Code.
5.
Any Condition that is subject to Rule 13.5(a) of the Takeover
Code may be waived by Bidco.
6.
If the Panel requires Bidco to make an offer or offers for
Darktrace Shares under the provisions of Rule 9 of the Takeover
Code, Bidco may make such alterations to the Conditions as are
necessary to comply with the provisions of that Rule.
7.
Bidco reserves the right to elect to implement the
Acquisition by way of an Offer as an alternative to the Scheme,
subject to the Panel's consent and (while the Cooperation Agreement
is continuing) to the terms of the Cooperation Agreement. In such
event, such Offer will be implemented on the same terms and
conditions so far as is applicable, as those which would apply to
the Scheme (subject to appropriate amendments, including (without
limitation and for so long as the Cooperation Agreement is
continuing and the Offer arises as a result of an Agreed Switch (as
defined therein)) an acceptance condition set at not more than 75
per cent. of the Darktrace Shares on a fully diluted basis (or such
other percentage as Bidco and Darktrace may agree in accordance
with the terms of the Cooperation Agreement, and, to the extent
necessary with the consent of the Panel, being in any case more
than 50 per cent. of the voting rights attaching to the Darktrace
Shares)). If the Acquisition is effected by way of an Offer, and
such Offer becomes or is declared unconditional and sufficient
acceptances are received in respect of such Offer, Bidco intends to
exercise its rights to apply the provisions of Chapter 3 of Part 28
of the 2006 Act so as to acquire compulsorily the remaining
Darktrace Shares in respect of which the Offer has not been
accepted.
8.
The Acquisition will be subject, inter alia, to the Conditions and
certain further terms which are set out in this Appendix 1 and
to the full terms which will be set out in the Scheme Document and
such further terms as may be required to comply with the provisions
of the Listing Rules, the provisions of the Takeover Code and the
applicable requirements of the Panel and the London Stock
Exchange.
9.
Darktrace Shares will be acquired by Bidco fully paid and
free from all liens, charges, encumbrances and other third party
rights of any nature whatsoever and together with all rights
attaching to them as at the Effective Date, including the right to
receive and retain all dividends and distributions (if any)
declared, made or paid after the Acquisition becomes
Effective.
10. If, on or
after the date of this announcement and prior to the Acquisition
becoming Effective, any dividend and/or other distribution and/or
other return of capital or value is announced, declared, made or
paid or becomes payable in respect of the Darktrace Shares, Bidco
reserves the right to reduce the consideration payable under the
terms of the Acquisition for the Darktrace Shares by an amount up
to the aggregate amount of such dividend and/or distribution and/or
other return of capital or value, in which case any reference in
this announcement to the consideration payable under the terms of
the Acquisition will be deemed to be a reference to the
consideration as so reduced. Any exercise by Bidco of its rights
referred to in this paragraph shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded
as constituting any revision or variation of the terms of the
Scheme or the Acquisition. In such circumstances, Darktrace
Shareholders would be entitled to retain any such dividend,
distribution and/or other return of capital or value.
11. The
availability of the Acquisition to persons not resident in the
United Kingdom may be affected by the laws or regulatory
requirements of the relevant jurisdictions. Persons who are not
resident in the United Kingdom should inform themselves about and
observe any applicable requirements.
12. The
Scheme will be governed by English law and be subject to the
jurisdiction of the Court, to the Conditions set out above and full
terms to be set out in the Scheme Document. The Acquisition will be
subject to the applicable requirements of the Takeover Code, the
Panel, the London Stock Exchange, the FCA, the Listing Rules and
the Registrar of Companies.
13. Each of
the Conditions shall be regarded as a separate Condition and shall
not be limited by reference to any other Condition.
Appendix 2
Sources and Bases of Information
In this announcement, unless
otherwise stated or the context otherwise requires, the following
sources and bases have been used.
1.
The fully diluted issued ordinary share capital of
685,792,880 Darktrace Shares as at 25 April 2024 (being the last
Business Day before the date of this announcement) is based
on:
1.1
703,683,540 Darktrace Shares in issue; plus
1.2 a maximum
of 40,843,192 net Darktrace Shares which may be issued on or after
the date of this announcement pursuant to the Darktrace Share
Plans, adjusted for the relevant strike prices using the Treasury
Stock Method; less
1.3
55,409,966 Darktrace Shares held in the Darktrace Employee
Benefit Trust; less
1.4 3,323,886
Treasury Shares.
2.
A value of approximately $5,315 million for the entire issued
and to be issued share capital of Darktrace is based on:
2.1 an offer
price of $7.75 per Darktrace Share; and
2.2
Darktrace's fully diluted issued ordinary share capital of
685,792,880 Darktrace Shares, as set out in paragraph 1
above.
3.
The implied enterprise value for Darktrace of approximately
$4,992 million is calculated by reference to the
valuation of the Acquisition referenced in paragraph 2 above, plus
reported operating lease liabilities of $60 million, less reported
cash and cash equivalents of $383 million as at 31 December
2023.
4.
Unless otherwise stated, the financial information of
Darktrace is extracted (without material adjustment) from the 2023
Darktrace Annual Report, the audited accounts of the Darktrace
Group for the 12 months ended 30 June 2023 and the unaudited,
consolidated financial statements of Darktrace for the six months
ended 31 December 2023.
5.
Darktrace's Adjusted EBITDA for the twelve months ended 31
December 2023 being $146 million;
6.
All prices and Closing Prices for Darktrace Shares are based
on closing middle market quotations derived from the Daily Official
List of the London Stock Exchange.
7.
The volume-weighted average prices and total shareholder
returns have been derived from Bloomberg data and have been rounded
to the nearest whole number.
8.
Exchange rates have been derived from Bloomberg and have been
rounded to the nearest four decimal places.
9.
The exchange rate used for the conversion of GBP into USD to
calculate the value of the Acquisition cash consideration and value
of the Acquisition is 1.2494, the Announcement Exchange Rate, which
is based on the exchange rate as at 4.30 p.m. on 25 April 2024
(being the last Business Day before the date of this
announcement).
10. Certain
figures included in this announcement have been subject to rounding
adjustments.
Appendix 3
Details of Irrevocable Undertakings
1.
Darktrace Directors and
Senior Employees
The following Darktrace Directors have given
irrevocable undertakings to vote (or, where applicable, procure the
voting) in favour of the Scheme at the Court Meeting and the
Resolutions at the General Meeting (or in the event that the
Acquisition is implemented by way of an Offer, to accept, or
procure the acceptance of, the Offer) in respect of their own
beneficial holdings (or those Darktrace Shares over which they have
control) of Darktrace Shares:
Name
|
Total Number
of
Darktrace Shares
|
Percentage of
existing issued share capital
|
Percentage of
existing Darktrace Shares eligible to vote at Court
Meeting
|
Gordon Hurst (Chair)
|
697,368
|
0.10%
|
0.10%
|
Poppy Gustafsson OBE (CEO)
|
3,849,967
|
0.55%
|
0.55%
|
Catherine Graham (CFO)
|
1,438,654
|
0.21%
|
0.21%
|
Jack Stockdale (CTO)
|
4,307,250
|
0.62%
|
0.62%
|
Nicole Eagan (CSO)
|
11,187,486
|
1.60%
|
1.60%
|
Lord David Willetts (Senior Independent NED and
Chair of Nomination Committee)
|
49,000
|
0.01%
|
0.01%
|
Sir Peter Bonfield CBE FREng (NED and Chair of
Remuneration Committee)
|
49,000
|
0.01%
|
0.01%
|
Paul Harrison (NED and Chair of Audit &
Risk Committee)
|
49,000
|
0.01%
|
0.01%
|
Total
|
21,627,725
|
3.1%
|
3.1%
|
These irrevocable undertakings also extend to
any Darktrace Shares acquired by the Darktrace Directors, whether
as a result of the exercise of options or the vesting of awards
under the Darktrace Share Plans or otherwise.
The irrevocable undertakings referred to in
this paragraph 1 cease to be binding on
the earlier of the following occurrences: (i) this announcement not
having been released by 10.00 a.m. (London time) on the date that
is one Business Day from the date of the undertaking (or such later
date as Bidco and Darktrace may agree); (ii) the Scheme Document is
not sent to Darktrace Shareholders within 28 days (or such later
period as the Panel may agree) after the date of this announcement;
(iii) 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 Takeover Code at the same time; (iv) the
Scheme lapses or is withdrawn in accordance with its terms unless,
by or prior to such time, Bidco has 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 Takeover
Code, and such Offer has not lapsed or been withdrawn; (v) the
Scheme has not become Effective by 11.59 p.m. on the Long Stop Date
(or such later time and/or date as agreed between Bidco and
Darktrace, 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 Takeover Code, and such Offer has
not lapsed or been withdrawn)); or (vi) the date on which any
competing offer for the entire issued, and to be issued, share
capital of Darktrace is declared wholly unconditional or, if
proceeding by way of a scheme of arrangement, becomes
Effective.
2.
Darktrace
Shareholders
The following Darktrace Shareholders have given
irrevocable undertakings to vote (or, where applicable, procure the
voting) in favour of the Scheme at the Court Meeting and the
Resolutions at the General Meeting (or in the event that the
Acquisition is implemented by way of an Offer, to accept, or
procure the acceptance of, the Offer) in respect of their own
beneficial holdings (or those Darktrace Shares over which they have
control) of Darktrace Shares:
Name
|
Total Number
of
Darktrace Shares
|
Percentage of
existing issued share capital
|
Percentage of
existing Darktrace Shares eligible to vote at Court
Meeting
|
KKR DA
|
51,250,881
|
7.3%
|
7.3%
|
Summit Partners
|
27,990,030
|
4.0%
|
4.0%
|
Total
|
79,240,911
|
11.3%
|
11.3%
|
These irrevocable undertakings also extend to
any Darktrace Shares acquired by such Darktrace
Shareholders.
The irrevocable undertakings referred to in
this paragraph 2 cease to be binding on
the earlier of the following occurrences: (i) this announcement not
having been released by 9.00 a.m. (London time) on the date of the
undertaking; (ii) in the event that the Acquisition proceeds by way
of a Scheme, (a) the Scheme Document not being posted to Darktrace
Shareholders within the permitted period under the Takeover Code or
as otherwise agreed with the Panel; or (b) the Scheme or any
resolution to be proposed not being approved by the requisite
majority of the Darktrace Shareholders or Scheme Shareholders at
the General Meeting or the Court Meeting; (iii) in the event the
Acquisition proceeds by way of an Offer, the offer document not
being posted to Darktrace Shareholders within the permitted period
under the Takeover Code or as otherwise agreed with the Panel; (iv)
the Scheme not becoming effective by 6.00 p.m. on the Long Stop
Date (or such later time or date as agreed between Bidco and
Darktrace, with the approval of the Court and/or the Panel if
required); (v) the Acquisition lapsing or being withdrawn in
accordance with its terms or 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; or (vi) any competing
offer for Darktrace becoming unconditional as to acceptances (if
made as a takeover offer) or becoming effective (if made through a
scheme of arrangement).
Appendix 4
Definitions
The following definitions apply throughout this
document unless the context otherwise requires:
"2006 Act"
|
the Companies Act 2006, as amended from time to
time
|
"2023 Darktrace Annual Report"
|
the annual report and audited accounts of the
Darktrace Group for the year ended 30 June 2023
|
"Acquisition"
|
the proposed acquisition by Bidco of the entire
issued, and to be issued, share capital of Darktrace by means of
the Scheme, or should Bidco so elect (subject to the Panel's
consent and the terms of the Cooperation Agreement), by means of an
Offer
|
"Adjusted EBITDA"
|
EBITDA pre-IFRS 16 adjustment and exceptional
charges;
|
"Announcement Exchange Rate"
|
the £:$ exchange rate of £1:$
1.2494 as at 4.30 p.m. on 25 April
2024 (being the last Business Day before the date of this
announcement) as derived from data provided by Bloomberg
|
"Articles"
|
the articles of association of Darktrace from
time to time
|
"associated undertaking"
|
shall be construed in accordance with paragraph
19 of Schedule 6 to The Large and Medium sized Companies and Groups
(Accounts and Reports) Regulations 2008 (SI 2008/410) but for this
purpose ignoring paragraph 19(1)(b) of Schedule 6 to those
regulations
|
"Authorisations"
|
authorisations, orders, grants, recognitions,
confirmations, consents, licences, clearances, certificates,
permissions or approvals, in each case of a Third Party
|
"Bidco"
|
Luke Bidco Limited
|
"Bidco Group"
|
Bidco and its subsidiary undertakings and where
the context permits, each of them
|
"Business Day"
|
a day, not being a public holiday, Saturday or
Sunday, on which clearing banks in London are open for normal
business
|
"certificated" or "certificated form"
|
in relation to a share or other security, a
share or other security title to which is recorded in the relevant
register of the share or other security as being held in
certificated form (that is, not in CREST)
|
"Closing Price"
|
the closing middle market price of a Darktrace
Share as derived from the Daily Official List on any particular
date
|
"Condition"
|
each of the conditions listed in
Part A of
Appendix 1 and any reference to a numbered
Condition shall be a reference to the Condition set out in the
paragraph of Part A of
Appendix 1 bearing such number
|
"Confidentiality Agreement"
|
the confidentiality agreement dated 27 March
2024 between Thoma Bravo and Darktrace
|
"Cooperation Agreement"
|
the cooperation agreement dated on or around
the date of this announcement between Bidco and
Darktrace
|
"Court"
|
the High Court of Justice in England and
Wales
|
"Court Meeting"
|
the meeting of Scheme Shareholders to be
convened at the direction of the Court pursuant to Part 26 of
the 2006 Act at which a resolution will be proposed to approve the
Scheme, including any adjournment thereof
|
"Court Order"
|
the order of the Court sanctioning the Scheme
under Part 26 of the 2006 Act
|
"CREST"
|
the relevant system (as defined in the
Regulations) in respect of which Euroclear is the operator (as
defined in CREST)
|
"Daily Official List"
|
the daily official list of the London Stock
Exchange
|
"Darktrace"
|
Darktrace plc
|
"Darktrace Directors"
|
the directors of Darktrace
|
"Darktrace Group"
|
Darktrace and its subsidiary undertakings and
where the context permits, each of them
|
"Darktrace Share Plans"
|
means each of (i) the Darktrace Holdings
Limited Company Discretionary Share Option Scheme 2013; (ii) the
Darktrace Growth Share Arrangement; and (iii) the Darktrace plc
2021 Award Incentive Plan
|
"Darktrace Share(s)"
|
ordinary shares of £0.01 each in the capital of
Darktrace
|
"Darktrace Shareholder(s)"
|
holders of Darktrace Shares
|
"Dealing Disclosure"
|
an announcement by a party to an offer or a
person acting in concert as required by Rule 8 of the Takeover
Code
|
"Disclosed"
|
the information fairly disclosed by or on
behalf of Darktrace: (i) in the 2023 Darktrace Annual Report; (ii)
in the half-year results for the six-months period ended 31
December 2023; (iii) in this announcement; (iv) in any other
announcement to a Regulatory Information Service prior to the
publication of this announcement; (v) in writing (including via the
virtual data room operated by or on behalf of Darktrace in respect
of the Acquisition) or orally in meetings and calls by Darktrace
management prior to the date of this announcement to Bidco or
Bidco's advisers (in their capacity as such)
|
"Disclosure Guidance and Transparency
Rules"
|
the Disclosure Guidance and Transparency Rules
sourcebook issued by the FCA
|
"Effective"
|
in the context of the Acquisition: (i) if the
Acquisition is implemented by way of the Scheme, the Scheme having
become effective pursuant to its terms; or (ii) if the Acquisition
is implemented by way of the Offer, the Offer having been declared
or having become unconditional in all respects in accordance with
the requirements of the Takeover Code
|
"Effective Date"
|
the date on which the Acquisition becomes
Effective
|
"Euroclear"
|
Euroclear UK & Ireland
Limited
|
"Excluded Shares"
|
(i) any Darktrace Shares legally
or beneficially held by Bidco or any member of the Wider Bidco
Group; and (b) any Treasury Shares
|
"FCA"
|
the Financial Conduct Authority or its
successor from time to time
|
"FCA Handbook"
|
the FCA's Handbook of rules and guidance as
amended from time to time
|
"Form of Election"
|
the form of election for use by Darktrace
Shareholders electing to receive their Acquisition cash
consideration in Sterling
|
"General Meeting"
|
the general meeting of Darktrace Shareholders
to be convened to consider and if thought fit pass, inter alia, the
Resolutions in relation to the Scheme including any adjournments
thereof
|
"Goldman Sachs"
|
together, Goldman Sachs International and
Goldman Sachs & Co. LLC
|
"HSR Act"
|
the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
thereunder
|
"Interim Facilities
Agreement"
|
the interim facilities agreement dated on or
around the date of this announcement and made between, among
others, Bidco as bidco, Leia Finco US LLC as borrower and guarantor
and Goldman Sachs Bank USA as interim facilities agent and interim
security agent, pursuant to which, inter alia, (i) an interim first
lien term facility in an aggregate amount principal amount of
$1,685,000,000 and (ii) an interim second lien term facility in an
aggregate principal amount of $460,000,000 were made available to,
among others, Leia Finco US LLC
|
"Jefferies"
|
Jefferies International Limited
|
"KKR DA"
|
KKR Dark Aggregator L.P.
|
"London Stock Exchange"
|
the London Stock Exchange plc or its
successor
|
"Long Stop Date"
|
27 January 2025 or such later date as may be
agreed between Bidco and Darktrace and, if required, the Panel and
the Court may allow
|
"Meetings"
|
the Court Meeting and the General
Meeting
|
"Offer"
|
subject to the consent of the Panel and the
terms of the Cooperation Agreement, should the Acquisition be
implemented by way of a takeover offer as defined in Chapter 3 of
Part 28 of the 2006 Act, the offer to be made by or on behalf of
Bidco to acquire the entire issued, and to be issued, share capital
of Darktrace, and, where the context admits, any subsequent
revision, variation, extension or renewal of such offer
|
"Official List"
|
the Official List of the FCA
|
"Opening Position Disclosure"
|
an announcement pursuant to Rule 8 of the
Takeover Code containing details of interests or short positions
in, or rights to subscribe for, any relevant securities of a party
to the Acquisition
|
"Overseas Shareholders"
|
holders of Scheme Shares who are resident in,
ordinarily resident in, or citizens of, jurisdictions outside the
United Kingdom
|
"Panel"
|
the Panel on Takeovers and Mergers
|
"Panel Clean Team Agreement"
|
the Panel clean team agreement entered into by
Darktrace, Thoma Bravo and their respective legal advisers on 12
April 2024
|
"PRA"
|
the Prudential Regulation Authority or its
successor from time to time
|
"Qatalyst Partners"
|
Qatalyst Partners Limited
|
"Registrar of Companies"
|
the Registrar of Companies in England and
Wales
|
"Regulations"
|
means the Uncertificated Securities Regulations
2001
|
"Regulatory Information
Service"
|
a regulatory information service as defined in
the FCA Handbook
|
"relevant securities"
|
as the context requires, Darktrace Shares,
other Darktrace share capital and any securities convertible into
or exchangeable for, and rights to subscribe for, any of the
foregoing
|
"Resolutions"
|
the resolution(s) to be proposed at the General
Meeting necessary to implement the Scheme, including, amongst other
things, a special resolution proposed in connection with, inter
alia, implementation of the Scheme and certain amendments to be
made to the articles of association of Darktrace
|
"Restricted Jurisdiction"
|
any jurisdiction where local laws or
regulations may result in a significant risk of civil, regulatory
or criminal exposure if information concerning the Acquisition (or
Offer if applicable) is sent or made available to Darktrace
Shareholders in that jurisdiction
|
"Sanction Hearing"
|
the Court hearing to sanction the
Scheme
|
"Scheme"
|
the proposed scheme of arrangement
under Part 26 of the 2006 Act between Darktrace
and the holders of the Scheme Shares, with or subject to any modification, addition or
condition approved or imposed by the Court and agreed by
Darktrace and Bidco
|
"Scheme
Document"
|
the document to be sent
to Darktrace Shareholders and
persons with information rights containing,
amongst other things, the Scheme and notices of the Meetings and
proxy forms in respect of the Meetings
|
"Scheme Record
Time"
|
the time and date to be specified in
the Scheme Document, expected to be 6.00 p.m. on the Business Day
immediately prior to the Effective Date
|
"Scheme Shareholders"
|
holders of Scheme Shares
|
"Scheme Shares"
|
all Darktrace Shares:
(i) in issue at the
date of the Scheme Document;
(ii) (if any) issued after
the date of the Scheme Document but before the Voting Record Time;
and
(iii) (if any) issued at or after
the Voting Record Time and before the Scheme Record Time in respect
of which the original or any subsequent holders thereof are, or
shall have agreed in writing to be, bound by the Scheme,
in each case, other than any
Excluded Shares
|
"subsidiary", "subsidiary undertaking" and
"undertaking"
|
shall be construed in accordance with the 2006
Act
|
"Summit Partners"
|
Summit DT Equity Holdings 3 LP and Summit DT
CLN Holdings 4
|
"Takeover Code"
|
the Takeover Code issued by the Panel on
Takeovers and Mergers, as amended from time to time
|
"Thoma Bravo"
|
Thoma Bravo, L.P.
|
"Thoma Bravo Funds"
|
investment funds managed and/or advised by
Thoma Bravo and/or its affiliates
|
"Treasury Shares"
|
any Darktrace Shares which are for the time
being held by Darktrace as treasury shares (within the meaning of
the 2006 Act)
|
"UK" or "United Kingdom"
|
the United Kingdom of Great Britain and
Northern Ireland
|
"uncertificated" or "in uncertificated form"
|
a share or other security title to which is
recorded in the relevant register of the share or security as being
held in uncertificated form, in CREST, and title to which, by
virtue of the Regulations may be transferred by means of
CREST
|
"Voting Record Time"
|
the time and date to be specified in the Scheme
Document by reference to which entitlement to vote on the Scheme
will be determined
|
"Wider Bidco Group"
|
the Bidco Group and associated undertakings and
any other body corporate, partnership, joint venture or person in
which Bidco and such undertakings (aggregating their interests)
have an interest of more than 30 per cent. of the voting or equity
capital or the equivalent
|
"Wider Darktrace Group"
|
Darktrace and associated undertakings and any
other body corporate, partnership, joint venture or person in which
Darktrace and such undertakings (aggregating their interests) have
an interest of more than 30 per cent. of the voting or equity
capital or the equivalent (excluding, for the avoidance of doubt,
Thoma Bravo and all of its associated undertakings which are not
members of the Darktrace Group)
|
References to an enactment include references
to that enactment as amended, replaced, consolidated or re-enacted
by or under any other enactment before or after the date of this
announcement.
All references to "pounds", "pounds Sterling",
"Sterling", "GBP", "£", "pence", "penny" and "p" are to the lawful
currency of the United Kingdom.
All references to "dollars", "USD", "$", "US$",
"cents" and "c" are to the lawful currency of the United
States.
All times referred to are London time unless
otherwise stated.
A reference to "includes" shall mean "includes
without limitation", and references to "including" and any other
similar term shall be construed accordingly.
Words in the singular shall include the plural
and vice versa.