Apax-backed Sophos seeks London listing

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Apax- and Investcorp-owned antivirus software developer Sophos expects to raise around $100m in an IPO on the London Stock Exchange planned for early July.

The listing will see at least 25% of the company in free float, with an over-allotment option of up to 15% of the total offer available depending on interest. The proceeds from the flotation are expected to reduce the company's net debt from its current 3.1x EBITDA ($318.8m) to around 2.2x.

Sophos posted revenues of $446.7m in the year ending in March 2015, compared to $378.8m and $361.6m in the two years prior, and a 2015 adjusted EBITDA of $101.4m.

Once listed, the company says it will target a dividend rate of 20% of Sophos's free cashflow for the financial year.

For Apax, the exit comes five years after the GP acquired a 70% stake in Sophos for £546m, in a secondary buyout from TA Associates. Apax and Investcorp are expected to agree to a customary six-month lock-up period.

Investcorp, meanwhile, initially acquired a 10% stake in the company as part of the deal that saw Sophos purchase German cybersecurity business Utimaco Safeware in 2008. Prior to the buyout, the GP had held a 24.99% stake in the Aachen-based company.

JP Morgan Cazenove and Morgan Stanley will act as joint global coordinators, as well as joint bookrunners alongside Deutsche Bank and UBS. JP Morgan will be the sole sponsor and Morgan Stanley will act as stabilisation manager.