Sale of Darktrace valued at $5.3 billion to be pushed forward despite the tragic death of founding investor Mike Lynch on his yacht

The death of British technology entrepreneur Mike Lynch, who died last weekend when his luxury yacht suddenly sank in the Mediterranean, is not expected to impact the sale of cybersecurity company Darktrace, in which he and his wife own a significant stake.

Thoma Bravo, a private equity firm specializing in software, agreed in April to buy Darktrace for $5.3 billion, and Darktrace shareholders approved the sale in June. The deal still requires regulatory approval, but Thoma Bravo expects to complete the acquisition by the end of 2024, a person familiar with the transaction said.

“If the shares have already been voted on, there is no obvious mechanism or need for further approval or action by shareholders, including the Lynch family or estate,” said a lawyer who advises on M&A transactions. Assets.

The sale has been thrust back into the spotlight following the yacht tragedy, which also killed Lynch's 18-year-old daughter and a prominent banker and lawyer. The deaths occurred the same week that Lynch's co-defendant was fatally run over by a car in a related fraud case. The fraud case involved Autonomy, a software firm founded by Lynch and sold to US technology giant HP, which accused him of inflating the company's value through accounting errors.

Lynch's connection to Darktrace is through his venture capital firm, Invoke Capital. In 2013, a team of Cambridge mathematicians, including current CEO Poppy Gustafsson, along with businesspeople and intelligence experts, founded the startup, which uses artificial intelligence to combat cyber threats. UK-based Darktrace raised $230.5 million in funding, according to Crunchbase. Invoke was one of Darktrace's first investors.

Darktrace went public in 2021, at the height of the IPO boom. But instead of listing in the US, Darktrace was traded on the London Stock Exchange. Invoke Capital was considered Darktrace's largest investor at the time, owning 39.5% of the company. Guardian reported. Within months of its IPO, Darktrace's valuation rose to nearly £7 billion ($9.2 billion).

In 2022, Thoma Bravo made its first attempt to buy Darktrace, but abandoned negotiations when both sides couldn't agree on terms. The private equity firm returned this year, closing a deal for Darktrace in April. By then, Lynch's stake in Darktrace had already dropped. The entrepreneur and his wife, Angela Bacares, owned about 7% of Darktrace, the person said. The couple's stake then continued to drop, to just over 3% by mid-August, according to another person familiar with Darktrace.

Lynch and his wife were on board a yacht called Bayesian according to Bayesian inference, a statistical model that formed the basis of his company, Autonomy. The boat sank off the coast of Sicily earlier this week and Lynch was pronounced dead on Thursday, August 22, while his wife survived. Lynch had not been associated with Darktrace for some time. When he died, he was not an officer of Darktrace, but a shareholder.

Lynch's influence on the UK tech scene was enormous and he was hailed as the “British Bill Gates”, although he was better known for his legal troubles. A Cambridge-trained mathematician, he developed software that could extract useful information from unstructured sources such as phone calls, emails and videos.

This software formed the core of Autonomy, which HP bought for $11 billion in 2011. The following year, however, HP was forced to write down $8.8 billion of Autonomy's value, making it one of the worst deals in history.

HP and U.S. prosecutors alleged that Lynch and Autonomy's former chief financial officer used accounting tricks to inflate the company's revenue before the 2011 sale. Assets reported. In August, a federal court in San Francisco acquitted Lynch of criminal fraud charges.

Lynch's deceased co-defendant in the fraud trial, Stephen Chamberlain, was formerly vice president of finance at Autonomy. Both men were acquitted in a U.S. criminal trial, but civil charges are pending. Chamberlain also worked for Darktrace; he joined Darktrace as CFO in 2016 and was named COO in September 2020. He went on administrative leave in June 2023, his LinkedIn profile said.

This story originally appeared on Fortune.com