Sophos looks to acquire Utimaco

Security firm Sophos is looking to acquire German encryption specialist Utimaco.

The company is offering a total of €217m in stock options, and a 61 per cent premium on Utimaco's average trading price.

Sophos has already reached an agreement with shareholder Investcorp Technology Partners to buy a 24.99 per cent stake in Utimaco. The company hopes to have the remainder of the shares secured by October.

Sophos chief executive Steve Munford hopes that the deal will broaden the company's reach and extend its product offerings.

"Companies of all sizes are looking to protect against external and internal threats with one manageable solution," he said.

"Integrating endpoint protection, network access control and encryption provides us with a great platform for innovation as the market continues to focus on securing and controlling information."

News of the proposed buyout earned a favourable reaction from industry pundits. Nick Selby and Paul Roberts at 451 Group called the move "an audacious and smart deal for both companies".

Aside from the combination of product lines, the analysts see a complementary pairing in the geographical reach of the two firms.

"The deal positions Sophos to gain geographical strongholds in Utimaco's traditional footholds of Scandinavia, Germany and elsewhere in central Europe, and boosts [Utimaco's] penetration into Asia and North America," they wrote.

"We love this deal and look on it as a win for both companies."