Sophos announced Wednesday that it had entered into an agreement to acquire Invincea, a move partners said would boost the company's platform strategy and next-generation endpoint security capabilities.

• Sophos Invincea Acquisition
• Sophos Acquisition Company
• Sophos Acquisition Thoma Bravo
• Sophos Acquisition

The deal is worth $100 million in cash, with a $20 million earn-out. The acquisition does not include Invincea Labs, which operates and is managed separately.

The acquisition offer was first announced on October 14, 2019. Stockholders voted to approve the transaction on December 3, 2019. Sophos was founded by Jan Hruska and Peter Lammer and began producing its first antivirus and encryption products in 1985. 'For the Sophos partner, the acquisition of Invincea just provides that complete next-generation endpoint protection for them to go to market with. Sophos develops, integrates and acquires. Acquisition search results. When you upgrade to Crunchbase Pro, you can access unlimited search results, save to custom lists or to Salesforce, and get notified when new companies, people, or deals meet your search criteria. Sophos, a global leader in next-generation cybersecurity, today announced the completion of its acquisition by Thoma Bravo, a leading private equity firm focused on the software and technology.

Invincea, of Fairfax, Va., uses machine learning and deep learning neural-network algorithms to detect unknown malware without the use of signatures. Kendra Krause, Sophos' vice president of global channels, said the addition of Invincea's machine learning capabilities fills out the last piece of Sophos' growing endpoint security portfolio.

[Related: Sophos Adds Encryption To Synchronized Security Strategy With SafeGuard Encryption 8 Launch]

(Reuters) - U.S. Private equity firm Thoma Bravo is adding Sophos Group SOPH.L to its cybersecurity stable, announcing on Monday a buyout deal that values the British maker of antivirus.

'Invincea brings that last piece we have been looking for, and that is machine-based learning,' Krause said in an interview with CRN. 'Sophos can now deliver a full, comprehensive technology into the next-generation endpoint security market.'

CTO Joe Levy said the Invincea technology will expand the Sophos platform to be able to perform meaningful analysis on malware samples, leveraging machine learning for predictive analysis, and to keep pace with an increasing amount of unknown threats. Levy said Sophos evaluated other alternatives, but found Invincea's machine learning algorithms and data architectures to have better detection and lower false positives than the alternatives. He said the addition of Invincea to the Sophos platform will help the company 'define what next-generation [endpoint security] means.'

'This is our stake in the ground as to what the essential components for a next-generation endpoint solution are,' Levy said.

Krause said the acquisition will be a big boost to partners as it expands the company's next-generation endpoint security capabilities and adds to its synchronized security platform.

'For the Sophos partner, [the acquisition of Invincea] just provides that complete next-generation endpoint protection for them to go to market with. Sophos develops, integrates and acquires technology to bring the best of what a next-generation security solution is to customers,' Krause said.

Sam Heard, president of Data Integrity Services, a Lakeland, Fla.-based Sophos partner, said he was glad to see Sophos continue to buy and integrate technologies that are focused on the security market.

'They’ve got a good track record of acquiring technologies and integrating it,' Heard said. 'I like this. I like this a lot.'

Heard said he particularly likes how the Invincea acquisition adds to Sophos' synchronized security platform, which he said really appeals to customers looking for integrated protection across both network and endpoint security.

'I love the synchronized security message. The stronger you can make an endpoint along with the firewall platform, the better overall picture… It's just going to make the product even better,' Heard said.

Krause said the entire Invincea team will be joining Sophos. That includes Invincea founder and CEO Anup Ghosh, who will now serve as chief evangelist for next-generation endpoint security at Sophos, and COO Norm Laudermilch. Ghosh said joining Sophos will allow Invincea's technology to reach more customers, and bring together two companies on the Gartner Magic Quadrant for endpoint security. He said Sophos is a good cultural and technical fit for Invincea.

'From an engineering and cultural point of view, we are completely aligned around vision and innovation. Sophos just has a tremendous platform and an amazing channel presence. From an entrepreneur's point of view, this is what we always wanted, which was get to market in a very big way,' Ghosh said in an interview with CRN.

The acquisition comes at the beginning of what is likely to be a period of significant consolidation in the endpoint security market. Krause said she predicts other platform security companies will follow suit in acquiring next-generation endpoint security startups, as customers are looking for a full set of integrated security solutions, instead of pieces of the puzzle.

'I would foresee continued consolidation,' Krause said. 'We believe we are very groundbreaking in the sense of having that compete solution. If we are first to market, I do believe others will follow.'

Sophos Invincea Acquisition

Krause said Sophos will run the Invincea partner program independently of the Sophos partner program in the near term to make sure both companies' partners and customers are fully supported. Invincea announced earlier this year that it had shifted to a 100-percent channel model, similar to that of Sophos, and launched a new partner program. She said Sophos will be working to integrate the Invincea technology into its portfolio, planning to do so in the next 12 months. As that time, she said, the company will decide how to integrate the partner programs.

The closing of the deal is pending various closing conditions, Sophos said.

by Joe Panettieri • Mar 2, 2020

Private equity firm Thoma Bravo‘s $3.9 billion buyout of Sophos has been completed, and the two companies remain deeply committed to an MSP-centric cybersecurity push, the firms said today.

This is M&A deal Number 131 that ChannelE2E has covered so far in 2020. See the complete M&A deal list here.

Sophos was an early mover in the MSP partner market. Scott Barlow, VP of Global MSP at Sophos, has been instrumental in the MSP-centric partners strategy.

The company’ Sophos Central dashboard provides MSPs with a single pane of glass for managing end-customers. The cloud-based dashboard is multi-tenant, and allows MSPs to add or remove various Sophos security services on the fly.

Moreover, Sophos has launched managed detection and response (MDR) and other services that MSPs and resellers can deliver to their end-customers. Some Sophos rivals promote MDR services that are often sold directly to end-customers and bypass the MSP partner channel.

Sophos Managed Security Services and Alternatives

Key Sophos rivals working in the MSP and MSSP partner channels include BlackBerry Cylance, CrowdStrike, Fortinet, Netsurion, SentinelOne, SonicWall, WatchGuard and Webroot from OpenText, among many others.

Thoma Bravo, meanwhile, is a powerhouse private equity investor and owner across the cybersecurity, IT management, and MSP-centric software markets. Key portfolio companies include Barracuda, ConnectWise and SolarWinds, among many others.

Key private equity rivals serving the MSP software market include Insight Partners, Summit Partners and Vista Equity Partners, among others.

Thoma Bravo Completes Sophos Acquisition: Executive Perspectives

Seth Boro, managing partner, Thoma Bravo

Sophos Acquisition Company

In a prepared statement about the deal, Sophos CEO Kris Hagerman said:

“Sophos is excited to work with Thoma Bravo as we begin our next chapter of growth and success, continuing in our mission to deliver the world’s most effective next-generation cybersecurity technology. Our transition to become a fully next-gen cybersecurity leader continues to rapidly progress. Last quarter, our next-gen product portfolio represented over 60% of our entire business, and grew 44% year-over-year. And very recently, we launched our most significant network security technology ever, the Sophos XG Firewall with Xstream architecture. With Thoma Bravo as a partner, we believe we can accelerate our progress and get to the future even faster, with dramatic benefits for our customers, our partners and our company as a whole.”

Added Seth Boro, managing partner at Thoma Bravo:

“Sophos has been constantly raising the bar with its industry-leading synchronized security, advanced deep learning technology and rapid growth within the MSP channel. We are excited to partner with Sophos to help build upon their success as they further drive innovation in cybersecurity.”

Sophos Acquisition Thoma Bravo

The deal’s completion had been delayed a few days by a last-minute compliance check that was quickly addressed.

Sophos Acquisition