Sophos Plc - Intention to Float on the London Stock Exchange

November 07, 2007 Sophos Press Release

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN OR TO A RESIDENT, NATIONAL OR CITIZEN OF AUSTRALIA, CANADA OR JAPAN.

This announcement is not a prospectus but an advertisement. Investors should not purchase or subscribe for any shares referred to in this announcement except on the basis of information in the prospectus to be published by Sophos Plc ("Sophos") in due course in connection with the admission of the ordinary shares in the capital of Sophos to listing on the Official List of the Financial Services Authority and to trading on London Stock Exchange plc's main market for listed securities (the "London Stock Exchange"). Copies of the prospectus will, following publication, be available from Sophos' registered office.

Sophos Plc

Intention to Float on the London Stock Exchange

Sophos, the international IT security and control company, today announces its intention to proceed with an offer (the "Global Offer") of ordinary shares (the "Shares") to institutional investors internationally, and to seek admission of its Shares to listing on the Official List of the Financial Services Authority and to trading on the main market of the London Stock Exchange.

Sophos is a fast growing, international provider of solutions that enable enterprises1 to secure and control their IT infrastructure against threats such as computer viruses, spam, spyware, hackers and policy abuse. Sophos reported billings of $167 million in the year ended 31 March 2007, and was identified by IDC as the largest unlisted company in the $13.2 billion Secure Content and Threat Management market.2 Its growth rates in billings in the year ended 31 March 2007 of 23% and in the first half of 2008 of 30% highlight its gains in market share when compared to an annualised growth rate of 11.8% for the industry sector.3 Sophos' products are used by approximately 65,000 customers in over 140 countries to protect an estimated 100 million end-users.

Increasingly open corporate networks, device proliferation, and an always-on threat environment mean that security focus has shifted from protecting the network perimeter to protecting the endpoint (desktop/laptop). Complex individual product strategies are being replaced by simple and coherent suites of products. Sophos has designed a highly integrated endpoint security and control solution for enterprises to address these industry needs. Recent notable wins, several of which have displaced competitors, include GE, which has purchased Sophos Endpoint Security and Network Access Control solutions for use on up to 350,000 of its computers.

About Sophos

Year to 31 March 6 Months to 30 Sept
2005 2006 2007 +%* 2006 2007 +%
Billings (US$m) 134.0 136.3 167.3 23% 72.0 93.7 30%
Free cashflow (US$m)** 27.5 28.6 29.6 4% 4.6 7.8 71%
Deferred revenue (US$m) 135.0 138.7 180.6 30% 149.9 203.8 36%

*2007 over 2006 % increase
**Cash from operations less capital expenditure plus interest income (pre-tax)

Growth strategy

Sophos' objective is to establish itself as the leading provider of endpoint security and control solutions for enterprises worldwide. To achieve this, Sophos intends to leverage its position in the emerging Network Access Control market, maintain its technology innovation and high quality of customer service and enhance Sophos' presence in North America by investing in sales and marketing. Management intend to expand the business both organically and through strategic acquisitions.

Board Appointment

Sophos is pleased to appoint Jonathan Brooks to the Board as Senior Non-Executive Director and Chairman of the Audit Committee. Jonathan Brooks, aged 51, also serves on the boards of Aveva Group plc, E2V Technologies Plc, Xyratex Ltd and Frontier Silicon Holdings Ltd and is Chairman of Picochip Inc. From 1995 to 2002, Mr Brooks served as the Chief Financial Officer of ARM Holdings Plc.

Steve Munford, Chief Executive of Sophos, said:

"Since its inception in 1985, Sophos has demonstrated consistent and sustained high growth - it is now a leading provider of IT security solutions around the world, currently serving over 100 million end-users in over 125 countries. Becoming a listed public company is a natural next step in our development. The demand for our solutions continues to grow, and listing will enable us to maximise our profile and take better advantage of the current exciting opportunities within our market."

TA Associates, a leading private equity firm with nearly 40 years of experience investing in profitable growth companies, is a minority investor in Sophos.

Morgan Stanley & Co. International plc ("Morgan Stanley") is acting as sole global co-ordinator and sponsor of the Global Offer. Deutsche Bank AG, London Branch, Morgan Stanley Securities Limited and UBS Limited are acting as joint bookrunners of the Global Offer.

Footnotes

1 Sophos customers include large corporations, small and mid-sized businesses, educational institutions and government agencies. Sophos is one of the only leading providers to focus exclusively on the enterprise market: it does not market to consumers.

2 Source: IDC, "Worldwide Secure Content and Threat Management 2007-2011 Forecast and 2006 Vendor Shares: 1+1=4," Doc # 207523, June 2007.

3 Source: IDC "Worldwide Secure Content and Threat Management 2007-2011 Forecast and 2006 Vendor Shares 1+1=4," Doc # 207523, June 2007. CAGR of 11.8% represents time period from 2006-2011.

4 Source: IDC, "Worldwide Secure Content and Threat Management 2007-2011 Forecast and 2006 Vendor Shares 1+1=4," Doc # 207523, June 2007.

5 Source: IDC, "Worldwide Secure Content and Threat Management 2007-2011 Forecast and 2006 Vendor Shares: 1 + 1 = 4," Doc # 207523, June 2007.

6 Source: IDC, "Worldwide Network Access Control 2007-2011 Forecast: Organisations Get the Knack for NAC," Doc # 206966, June 2007.