Thoma Bravo-owned Sophos to acquire Secureworks for $859M

Sophos will acquire XDR vendor Secureworks for approximately $859 million in an all-cash deal, the companies announced Monday.

Sophos is a major player in the enterprise endpoint and network security space. In October 2019, private equity firm Thoma Bravo announced it would acquire Sophos for a cash offer of $3.9 billion. The deal was completed March 2, 2020. Secureworks, meanwhile, is best known for its Taegis XDR platform and was previously owned by Dell before going public in 2016. Last year, Secureworks CEO Wendy Thomas spoke with TechTarget Editorial at RSA Conference 2023 to discuss AI and the evolving detection and response landscape.

The acquisition, which is expected to close in early 2025, would enable Secureworks shareholders to receive $8.50 per share in cash at the deal's closing. According to a joint press release, Sophos' ultimate aim is to integrate products from both companies to provide a broader portfolio to both enterprises as well as small and medium-sized businesses. The two companies highlighted Secureworks' offerings in operational technology security and identity detection and response, among others.

Sophos CEO Joe Levy said in the press release that the deal will strengthen the companies' collective position in the market, continuing the theme of integrating both organizations into a single broader portfolio.

"Secureworks offers an innovative, market-leading solution with their Taegis XDR platform. Combined with our security solutions and industry leadership in MDR, we will strengthen our collective position in the market and provide better outcomes for organizations of all sizes globally," Levy said. "Secureworks' renowned expertise in cybersecurity perfectly aligns with our mission to protect businesses from cybercrime by delivering powerful and intuitive products and services. This acquisition represents a significant step forward in our commitment to building a safer digital future for all."

Thomas similarly emphasized the collective strength of the two companies.

"Our mission at Secureworks has always been to secure human progress. Sophos' portfolio of leading endpoint, cloud, and network security solutions -- in combination with our XDR-powered managed detection and response -- is exactly what organizations are looking for to strengthen their security posture and collectively turn the tide against the adversary," she said. "As Joe and I both believe, this transaction will strengthen our go-to-market offering with Sophos' global scale, expertise and reputation."

TechTarget Editorial asked Sophos whether its plan would be to maintain Secureworks as an independent entity or fully fold it into Sophos branding. Sophos declined to comment, though a spokesperson shared the following statement from Levy.

"At this intent stage, we are focused on the post-signing details. Until the close is official, it is business as usual at each organization," Levy said. "The acquisition provides us an exciting opportunity to integrate solutions from both companies into a broader and stronger security portfolio, advancing our goal of helping under-protected organizations improve their security posture. Specifically, this will strengthen the security operations services for organizations needing additional help augmenting their in-house SOCs or need a fully managed service."

Dave Gruber, principal analyst at TechTarget's Enterprise Strategy Group, said he felt the acquisition was a "great move for Sophos."

"Sophos, already poised as a leader in cybersecurity solutions for this audience, launched a widely successful MDR service two years ago, upselling integrated managed security services to their growing customer base," Gruber said. "Scaling operations to serve an audience of this size is challenging, making this acquisition a smart move for Sophos, as Secureworks has many of the best and brightest security professionals in the industry. Included in the acquisition is a scalable XDR solution and operating infrastructure, positioning Sophos to offer additional, more comprehensive detection and response capabilities for their customers."

Omdia Cybersecurity managing principal analyst Eric Parizo, meanwhile, referred to the acquisition as a "bit of a pivot" on Sophos' part, given the company's shift toward profit after getting acquired by Thoma Bravo nearly five years ago. However, due to the movement of vendors toward managed services and access to a wider audience, he argued that acquiring Secureworks made sense.

"Trend Micro, BlackBerry and others, including Sophos itself, have been moving to capitalize on growing interest in service-solution hybrid offers that meet customers where they are, namely more customize managed services offers provided by the foremost experts in the technologies they use: the vendors themselves," he said. "The acquisition of Secureworks expands and accelerates Sophos' ability to provides a broader array of services, most notably managed XDR, across a broader spectrum of industries and customer sizes."

As for Secureworks, Parizo noted a decline of "fortunes" on the XDR vendor's part following strategy shifts and issues involving its current majority owner Dell.

"Its Taegis XDR platform, developed to be a growth engine for the company, has struggled to differentiate in a crowded marketplace," he said. "With both revenue and headcount declining steadily in the past several years, and no clear path forward, Secureworks' exit was a reasonable decision to recoup value for shareholders."

Alexander Culafi is a senior information security news writer and podcast host for TechTarget Editorial.