In the most recent deal that underscores the heightened interest in the security software market, private equity firm Thoma Bravo will acquire SailPoint Technologies (SAIL.N) for $6.12 billion. The cybersecurity firm confirmed these reports on April 11.
Thoma Bravo already has key investments in firms including Sophos, Barracuda Networks, and Proofpoint Inc. It will boost its strength in the security-focused space through its acquisition of Austin, Texas-based SailPoint.
SailPoint, launched in 2005, saw its shares close at $64.05 on Monday, a 29% jump from Friday last week.
Due to the Russian invasion of Ukraine that has led to a spike in cyberattacks, as well as a COVID-19 pandemic-led shift to remote working, cybersecurity has remained a hot sector for buyouts. On April 11, investors led by Insight Partners took Datto, a security solutions provider, private in a $6.2 billion deal.
Before its initial public offering (IPO) in 2017, Thoma Bravo, which manages more than $103 billion in assets, was the majority stakeholder in SailPoint. At the end of 2018, it exited its position.
On Monday, SailPoint said its shareholders will receive $65.25 per share in cash, representing a premium of 31.6% as of Friday’s close. The deal is valued at about $6.9 billion, covering the debt.
The deal could help SailPoint fund potential transformative acquisitions with the dry powder from Thoma Bravo, and speed up its transition to a software as a service (SaaS) model without the scrutiny of being a public company.
The go-private deal, expected to close in the second half of this year, would enable SailPoint to expand its markets on the back of additional capital from the private equity firm and pursue long-term growth with greater flexibility, as highlighted by its Chief Executive Officer Mark McClain. He added:
“We’re about 10% penetrated in our target market. We have a lot of room to grow in terms of what we add to our portfolio.”
SailPoint helps businesses reduce the risk of sensitive data leakage and mitigate unwanted user access as it specializes in software related to identity and access management. Last year, shares of SailPoint had lost about 9.2%.
