Bidco Completes Acquisition of Darktrace in Court-Sanctioned Scheme of Arrangement

Key Points:

1. Bidco completed the acquisition of Darktrace via a Court-sanctioned scheme of arrangement.
2. Shareholders had the option to receive payment in GBP, with an exchange rate of $1.30925:£1.
3. The total GBP amount payable to electing shareholders is £352,224,450.64, with £5.92 per share.

On 26 April 2024, the boards of directors of Luke Bidco Limited ("Bidco") and Darktrace plc (LSE:DARK) reached an agreement for the acquisition of Darktrace by Bidco. This recommended all-cash acquisition involved Bidco purchasing the entire issued and to-be-issued ordinary share capital of Darktrace. The acquisition was structured as a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006. The terms and conditions of the deal were outlined in the Scheme Document, which was made available to Darktrace shareholders on 23 May 2024.

On 1 October 2024, both Darktrace and Bidco announced that the Scheme had officially become effective, marking the completion of the acquisition. The scheme of arrangement was a key legal process that allowed the acquisition to proceed with the approval of the Court and shareholders.

A notable feature of the Scheme was the option for certain Darktrace shareholders to elect to receive their cash consideration in GBP sterling, based on an exchange rate obtained by Bidco after the Scheme Record Time. This option was designed to accommodate shareholders who preferred to receive their payments in British pounds rather than US dollars.

Bidco has now confirmed the Average Market Exchange Rate it obtained for this purpose: $1.30925 to £1. Consequently, the total amount payable to Scheme shareholders who opted for payment in GBP sterling is £352,224,450.64. The equivalent value of the consideration per Scheme share is approximately £5.92, reflecting the agreed exchange rate and rounding to two decimal places.

This acquisition represents a significant move for both companies. Darktrace, a leading cybersecurity firm known for its artificial intelligence-driven security solutions, has gained significant attention in recent years due to its innovative technology and rapid growth. Bidco’s acquisition of Darktrace is expected to provide further resources and strategic direction, potentially fueling Darktrace’s future expansion and development.

The acquisition was welcomed by both companies' boards, with Darktrace’s board recommending that shareholders approve the deal. The structure of the acquisition, a court-sanctioned scheme of arrangement, is a well-established method for facilitating acquisitions in the UK. It requires not only approval by shareholders but also legal oversight, ensuring that the transaction is carried out fairly and in accordance with UK corporate law.

The ability of shareholders to elect the currency of their consideration underscores the flexibility offered in this acquisition process, allowing participants to manage currency risk based on their preferences. The final exchange rate and payment amounts reflect market conditions leading up to the payment date, providing a transparent and fair basis for the conversion of the consideration into GBP sterling.

With the acquisition now complete, Darktrace will continue to operate under the ownership of Bidco, which is expected to support the company’s ongoing growth and development. The cybersecurity market remains a dynamic and rapidly evolving sector, and this acquisition positions Darktrace to continue its upward trajectory in this competitive landscape.

The future direction of Darktrace under Bidco’s ownership will likely focus on expanding its cybersecurity solutions, enhancing its technology offerings, and exploring new market opportunities. The acquisition marks a new chapter for Darktrace as it transitions to being part of a larger corporate structure, with the potential for significant growth in the years ahead.