Sophos Group plc - Announcement of Offer Price - Offer Price set at 225 pence

26th June 2015

Following the announcement by Sophos Group plc on 3 June 2015 of its intention to proceed with an initial public offering, the Company today announces the successful pricing of the Offer at 225 pence per Share.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction, including in or into or from the United States, Australia, Canada or Japan. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with any offer or commitment whatsoever in any jurisdiction. Investors should not purchase any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") expected to be published by Sophos Group Limited (to be re-registered as Sophos Group plc prior to Admission)  in due course in connection with the proposed admission of its ordinary shares ("Shares") to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of London Stock Exchange plc (the "London Stock Exchange") (together, "Admission"). A copy of the Prospectus will, following its publication, be available at the Group's registered office at The Pentagon, Abingdon, OX14 3YP, United Kingdom.

26 June 2015

Sophos Group plc

Announcement of Offer Price

Offer Price set at 225 pence

Following the announcement by Sophos Group plc ("Sophos", the "Company" or together with its subsidiaries, the "Group") on 3 June 2015 of its intention to proceed with an initial public offering (the "IPO" or the "Offer"), the Company today announces the successful pricing of the Offer at 225 pence per Share (the "Offer Price"). Based on the Offer Price, the market capitalisation of the Company will be £1,013 million at the commencement of conditional dealings. 

Kris Hagerman, Chief Executive of Sophos said:

"Today marks a significant milestone for all of us at Sophos. We are proud to be part of Britain's growing tech economy as a listed business and a leading global provider in the cyber security sector.  Working with our 15,000 channel partners worldwide, we look forward to the next stage of our development as a public company - and to continuing to deliver "complete IT security made simple" for enterprises of any size."     

Offer Highlights

·      The Offer Price has been set at 225 pence per Share

·      Based on the Offer Price, the total market capitalisation of Sophos at the commencement of conditional dealings will be £1,013 million

·      The Offer comprises 156,521,740 Shares, representing 34.8% of the Company's issued share capital on Admission (assuming no exercise of the Over-allotment Option)

·      The Company is raising approximately US$125 million of gross proceeds in the Offer

·      The net proceeds from the Offer payable to the Company will be used to reduce overall indebtedness and provide the Company with greater financial flexibility to drive the future growth of the business

·      The Selling Shareholders (comprising Apax US VII, LP, Apax Europe VII-A, LP, Apax Europe VII-B, LP, Apax Europe VII-1, LP, Apax Europe VI-A, LP and Apax Europe VI-I, LP (the "Apax Funds"), ITPU Holdings Limited ("Investcorp"), the Group's founders, the Directors, certain members of the Group's management and other investors) will receive gross proceeds of approximately £272.6 million pursuant to the Offer

·      Following Admission (and assuming no exercise of the Over-allotment Option):

o  The Apax Funds will hold 40.1% of the Shares

o  The Founders will hold 18.9% of the Shares

o  Investcorp will hold 2.5% of the Shares

o  The Directors will hold 1.7% of the Shares

·      The Selling Shareholders have granted Morgan Stanley, as stabilising manager, the Over-allotment Option over up to 23,478,260 Shares, representing 15% of the Shares comprised in the Offer. If the Over-allotment Option were exercised in full, the incremental gross proceeds raised by the Selling Shareholders would be approximately £52.8 million 

Admission and dealings

·      Conditional dealings in the Shares will commence on the London Stock Exchange at 8:00am on 26 June 2015 under the ticker SOPH (registered with ISIN number GB00BYZFZ918)

·      Admission to the premium segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange, and the commencement of unconditional dealings in the Shares on the London Stock Exchange, are expected to take place at 8:00am on 1 July 2015. All dealings in Shares prior to the commencement of unconditional dealings will be on a "when issued" basis and will be of no effect if Admission does not take place and such dealings will be at the sole risk of the parties concerned

·      At Admission, the Company will have 450,000,000 Shares in issue 

Further Information

·      The New Shares to be issued pursuant to the Offer will, following Admission, rank pari passu in all respects with each other and with the Existing Shares and will rank in full for all dividends and other distributions declared, made or paid in respect of the Shares after Admission

·      Subject to certain customary exceptions, a lock up period will be in place for the Company, the Apax Funds, Investcorp, the Founders (180 days) and Directors and certain members of the Group's management (360 days) prohibiting the further sale of Shares without the prior written consent of the Joint Global Coordinators

·      Subject to satisfying the appropriate criteria, the Company may be eligible, following completion of the Offer, for inclusion in the FTSE UK Index Series at the quarterly review in September 2015

·      In relation to the Offer and Admission, J.P. Morgan Cazenove and Morgan Stanley are acting as Joint Global Coordinators and Joint Bookrunners (with J.P. Morgan Cazenove acting as Sponsor), Deutsche Bank and UBS are acting as Joint Bookrunners and Numis Securities and Pacific Crest are acting as Co-Lead Managers. Moelis & Company is acting as Financial Adviser to the Group

Full details of the Offer will be included in the Prospectus, expected to be published and available on the Company's website later today.

Disclaimer / Forward looking statements

Important notice

The contents of this announcement, which has been prepared by and is the sole responsibility of the Group, have been approved by J.P. Morgan Securities plc and Morgan Stanley & Co. International plc for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000, as amended ("FSMA").

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada, Japan or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The Offer and the distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Australia, Canada or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The securities referred to herein may not be offered or sold, directly or indirectly, in the United States unless registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or offered in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act. The offer and sale of securities referred to herein has not been and will not be registered under the U.S. Securities Act or under the applicable securities laws of Australia, Canada or Japan. There will be no public offer of the Shares in the United States, Australia, Canada or Japan. Subject to certain exceptions, the Shares referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan.

In any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") other than the United Kingdom, this announcement is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive. In addition, in the United Kingdom, this announcement is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents. This announcement contains statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. The forward-looking statements reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, liquidity, prospects, growth and strategies. The forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance.

Each of the Group and J.P. Morgan Securities plc, Morgan Stanley & Co. International plc, Deutsche Bank AG, London Branch, UBS Limited, Numis Securities Limited and Pacific Crest Securities, a division of KeyBanc Capital Markets Inc. (together, the "Banks"), Moelis & Company UK LLP (the "Adviser" or "Moelis & Company") and their respective affiliates expressly disclaim any obligation or undertaking to update, review or revise any of the forward-looking statements contained in this announcement whether as a result of new information, future developments or otherwise.

This announcement is an advertisement and not a prospectus. Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information in the Prospectus intended to be published by Sophos in due course in connection with the proposed admission of its Shares to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange. Copies of the Prospectus will, following publication, be available from the Group's website, subject to applicable securities laws, and at the Company's registered office. Any purchase of Ordinary Shares in the proposed Offer should be made solely on the basis of the information contained in the final Prospectus to be issued by the Company in connection with the Offer. Before purchasing any Ordinary Shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Ordinary Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The information in this announcement is subject to change.

The Offer timetable, including the date of Admission, may be influenced by a range of circumstances such as market conditions. There is no guarantee that the Offer will proceed and that Admission will occur and you should not base your financial decisions on the Group's intentions in relation to the Offer and Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Offer. The value of Shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the IPO for the person concerned.        

Each of J.P. Morgan Securities plc, Morgan Stanley & Co. International plc and UBS Limited, who are each authorised by the Prudential Regulation Authority (the "PRA") and regulated by the FCA and the PRA in the United Kingdom, Deutsche Bank AG, London Branch, which is regulated by Germany's Federal Financial Supervisory Authority, BaFin and is also authorised by the PRA, but may only be subject to limited regulation by the FCA and the PRA, Numis Securities Limited and Moelis & Company UK LLP, who are each authorised and regulated by the FCA in the United Kingdom and Pacific Crest Securities, a division of KeyBanc Capital Markets Inc., which is regulated by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, are acting exclusively for the Group and no-one else in connection with the Offer. None of the Banks or the Adviser will regard any other person (whether or not a recipient of this document) as a client in relation to the Offer and will not be responsible to anyone other than the Group for providing the protections afforded to their respective clients nor for giving advice in relation to the Offer or any transaction or arrangement referred to herein.

In connection with the Offer, each of the Banks and any of their respective affiliates, acting as investors for their own accounts, may purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Shares and other securities of the Group or related investments in connection with the Offer or otherwise. Accordingly, references in the final Prospectus, once published, to the Shares being offered, acquired, sold, placed or otherwise dealt in should be read as including any offer, sale, acquisition, placing or dealing in the Shares by any of the Banks and any of their affiliates acting as investors for their own accounts. In addition, certain of the Banks or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of Shares. None of the Banks intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Apart from the responsibilities and liabilities, if any, which may be imposed on any of the Banks or the Adviser by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforcable, none of Banks, the Adviser or any of their respective affiliates, directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Group, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offer, Morgan Stanley (the "Stabilisation Manager"), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. Morgan Stanley is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings in the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on Morgan Stanley or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer price. Save as required by law or regulation, neither Morgan Stanley nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.

In connection with the Offer, the Stabilisation Manager may, for stabilisation purposes, over-allot Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Offer. For the purposes of allowing it to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilisation period, the Stabilisation Manager will enter into over-allotment arrangements pursuant to which the Stabilisation Manager may purchase or procure purchasers for additional Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Offer (the "Over-allotment Shares") at the offer price. The over-allotment arrangements will be exercisable in whole or in part, upon notice by the Stabilisation Manager, for 30 calendar days after the commencement of conditional dealings in the Shares on the London Stock Exchange. Any Over-allotment Shares sold by the Stabilisation Manager will be sold on the same terms and conditions as the Shares being sold in the Offer and will form a single class for all purposes with the other Shares.

Certain figures contained in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

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