Another day, another big private equity acquisition. It’s widely known that private equity firms are awash in cash these days and looking to direct it into acquisitions. Last month, Thoma Bravo acquired Anaplan for almost $11 billion. Today, it announced its intention to buy identity security company SailPoint for $6.9 billion — and the beat goes on.
Cybersecurity is a hot area right now as companies try to protect themselves against increasingly sophisticated attackers. That’s why the sector is attracting billions in startup investment, while private equity firms are also hopping on the bandwagon. For Thoma Bravo, this acquisition represents the sixth security-focused company in the firm’s portfolio.
In its most recent earnings report on February 28, SailPoint reported decent, but not spectacular results, which is just the kind of company that private equity firms like Thoma Bravo love. Its fourth-quarter revenue came in at $135.6 million, up 31% year over year, while total revenue was $439 million, up 20% over the prior year.
Seth Boro, managing partner at Thoma Bravo, sees a company with a great deal of potential, especially as more employees are working from home since the start of the pandemic, and companies need to ensure identity security wherever a worker happens to be. “Their market-leading identity security platform provides the autonomous and intelligent approach that the market requires today, especially among larger enterprises and as hybrid working becomes more common,” Boro said in a statement.
Unpacking SailPoint’s $6.9B sale to private equity firm Thoma Bravo
The company’s shareholders will receive $65.25 per share under the terms of the deal. For comparison, this morning before the market opened, the company was selling at $49.29 per share, which was down 1.65%. It has a market cap of $4.67 billion.
SailPoint founder and CEO Mark McClain saw the deal in terms of delivering great value for his shareholders and a way to continue growing the company by taking it private and getting additional investment from the private equity firm.
SailPoint’s board has already approved the deal, but it still requires the approval of shareholders. In addition, there is a go-shop provision that expires on May 16 that enables SailPoint to continue to look for another buyer who would offer a better deal. If that were to happen, SailPoint could take the better offer.
If all that comes together and the acquisition passes regulatory review, the transaction is expected to close sometime in the second quarter.
SailPoint was founded in 2005 and raised $26 million, according to Crunchbase data, before going public in 2017. The company is expected to continue to operate out of its headquarters in Austin, Texas.
After Anaplan, which SaaS company will private equity target next?
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