Cycle to Work scheme foils Sophos takeover in FCA obligation mishap

Update: Sophos has now announced that Thoma Bravo’s acquisition of the company has reached completion.

The takeover of British security firm Sophos by Surf Buyer Limited, a US Venture capital company, has hit a stumbling block after the company failed to clear its obligations with the Financial Conduct Authority (FCA), reports The Register.

Why is this relevant? Sophos was a member of the Government’s Cycle to Work scheme which is regulated by the FCA, meaning anyone taking control of Sophos needed to clear its obligations under the cycle scheme with the body before the takeover could be given the thumbs up.

According to a statement posted to the Regulatory News Service, Bidco became aware that Sophos had limited regulatory permission from the FCA to, “provide finance to employees for the purchase of cycles or cyclist safety equipment under the UK Government’s ‘cycle to work’ scheme.”

Under UK financial regulation, a company which is able to offer equipment under the scheme with a value in excess of £1000 must be authorised by the FCA. At the present time, Sophos has extended arrangements with a value in excess of this, and therefore, “any person acquiring control of an authorised entity must seek the FCA’s approval.”

As a result of this, Sophos will delay the delivery of a copy of the court order to the Registrar of Companies in order to allow Bidco to notify the FCA of the acquisition, and will continue to trade on the London Stock Exchange, for the time being.

Surf Buyer Limited is a vehicle owned by Thoma Bravo, which also owns the likes of McAfee, parts of Symantec and Barracuda Networks, and purchased Sophos in a £3 billion deal in October.