Private equity major Carlyle is looking to offload its 80 per cent equity stake privately held network security solutions provider Cyberoam Technologies to UK-based Sophos Group, according to two separate reports in The Economic Times and The Times of India. The reports, citing sources, pegged the deal value at Rs 430-500 crore ($70-80 million).
Carlyle had initially invested around 60 per cent stake in Ahmedabad-based Elitecore Technologies for around Rs 43 crore ($10.3 million then), the parent company of Cyberoam, and later hiked its stake in the firm to 87.5 per cent with additional investment.
Later on, Cyberoam was spun out of the company with Carlyle holding majority stake and Hemal Patel, the erstwhile promoter of Elitecore, owning the rest.
The reports said Patel will continue to operate the company after the majority stake acquisition by Sophos Group.
Presently, Cyberoam Technologies has global presence spanning across 125 countries with offices in America, Middle East and India, along with R&D and global support management centres in India. The company has 450 employees.
Sophos is into antivirus and encryption products and has been in the business for nearly three decades. Today its products are used to secure the networks used by 100 million people in 150 countries and 100,000 businesses, including Pixar, Under Armour, Northrop Grumman, Xerox, Ford, Avis and Toshiba.
Sophos itself is backed by private equity firm Apax Partners, who had invested $580 million in the company to acquire a 70 per cent stake in early 2010. Following the equity infusion by Apax, Sophos bought out the world’s fourth-largest UTM appliance vendor Astaro in 2011.
If the deal materialises it could be second-big exit by Carlyle in as many months in India. Last month it sold its entire stake in Tirumala Milk Products to Lactalis. The fund generated a three-fold return on its investments Tirumala Milk. The exit from Cyberoam could be much bigger.
(Edited by Joby Puthuparampil Johnson)