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FTSE: Darktrace shares plummet after failed takeover bid

·2-min read
UKRAINE - 2021/07/15: In this photo illustration, Darktrace logo of a company that specialises in cyber defense is seen on a smartphone. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
UKRAINE - 2021/07/15: In this photo illustration, Darktrace logo of a company that specialises in cyber defense is seen on a smartphone. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

Cyber security firm Darktrace (DARK.L) showed positive end-of-year results with a boost in sales, but the firm's share price plummeted after takeover talks with private equity firm Thoma Bravo collapsed.

Shares in Darktrace dropped 33% in early trading in London on Thursday, down 172p to 341p.

On Thursday, the firm provided its results for the year ending 30 June 2022 and stated it had a strong year-over-year revenue growth across all geographic markets and customer sizes.

Revenue was up 45.7% to $415.4m (£359.4bn) for the financial year from $285m in the same period the year before.

Darktrace reported a strong operating and financial performance resulting in a significant 32.1% year-over-year growth in their customer base.

However, the slump in the share price came after private equity firm US private equity group Thoma Bravo pulled out of takeover bid talks.

Darktrace said: “Early stage discussions took place with Thoma Bravo about a possible offer for the company but an agreement could not be reached on the terms of a firm offer.

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“The board continues to be very confident in the company’s future prospects as demonstrated by its FY22 results released today."

Head of investment at interactive investor Victoria Scholar said: "Darktrace swung from a loss of $34.8m last year to operating profit of $7.6m this year. Gross profit rose by 44.4% to $370.6m on revenues up 45.7%. The cybersecurity firm confirmed its full-year 2023 expectations."

She added: "In August, Darktrace shares surged after deal talks were made public with a 12 September deadline set for Thoma Bravo to make a formal offer or walk away.

"The breakdown of deal talks comes as a serious disappointment for Darktrace, which could have been set to privatise and avoid the rest of this year’s equity market volatility. However, the underlying fundamentals of Darktrace’s business are robust with strong demand this year amid a surge in cybersecurity threats."

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