Another day, another major private equity deal. It’s common knowledge that private equity companies are flush with cash these days and want to put it to good use by making acquisitions. Thoma Bravo paid over $11 billion for Anaplan last month. It announced today that it will purchase identity security provider SailPoint for $6.9 billion — and the drumbeat continues. Companies are trying to protect themselves against more sophisticated attacks, therefore cybersecurity is a prominent topic right now. That is why the industry is garnering billions of dollars in startup funding, as well as private equity companies jumping on board. This purchase marks Thoma Bravo’s sixth security-focused company in its portfolio.
SailPoint’s most recent financial report, released on February 28, showed solid but not exceptional results, which is exactly the type of company that private equity companies like Thoma Bravo enjoy investing in. The company’s fourth-quarter sales was $135.6 million, up 31% year over year, while overall revenue was $439 million, up 20% year over year. Seth Boro, managing partner at Thoma Bravo, sees a firm with a lot of promise, especially now that more people are working from home since the outbreak, and businesses need to secure identity protection wherever their employees are.
Boro stated in a statement that “their industry-leading identity security platform delivers the autonomous and intelligent approach that the market wants today, especially among larger businesses and as hybrid working becomes more popular.” Under the terms of the agreement, the company’s stockholders will get $65.25 per share. For reference, the business was trading at $49.29 per share this morning before the market opened, down 1.65%. It has a $4.67 billion market capitalization.
Mark McClain, the founder and CEO of SailPoint, viewed the agreement as a chance to provide excellent value to his shareholders as well as an opportunity to continue developing the company by taking it private and obtaining further funding from the private equity firm. The purchase has already been accepted by SailPoint’s board of directors, but shareholder approval is still required. Furthermore, there is a go-shop option that expires on May 16 that allows SailPoint to continue looking for a better bargain from another buyer. If this were to occur, SailPoint would be able to accept the superior offer.
The purchase is likely to finalize in the second quarter if everything comes together and the acquisition passes regulatory clearance. According to Crunchbase records, SailPoint was started in 2005 and raised $26 million before going public in 2017. The company’s headquarters in Austin, Texas is likely to remain operational.
