Quiver Quantitative - Software powerhouse, SolarWinds (SWI), currently under the stewardship of both Silver Lake Management and Thoma Bravo, is contemplating strategic pathways, including a potential divestment, sources close to the situation revealed. The Austin-headquartered firm is liaising with financial consultants to establish a sale trajectory expected to commence in the early stages of the forthcoming year. While deliberations are ongoing, the possibility of SolarWinds retaining its independence cannot be discounted, the insiders highlighted.
SolarWinds' stock price observed a marginal dip of 0.5%, settling at $8.89 during Thursday's trading in New York, which pegs the firm's market capitalization around the $1.5 billion mark. Since its re-entry into the public market in October 2018, the enterprise has witnessed a substantial 44% depreciation in its share value, as documented by Bloomberg's data.
Boasting a robust clientele of over 300,000, SolarWinds' suite of offerings caters to IT professionals, facilitating the streamlined management of pivotal corporate infrastructure operations. The company's emergence into the spotlight coincides with an escalating interest from private equity entities, who harbor a predilection for software-centric firms. This inclination stems from the predictable revenue streams and the potential for industry consolidation these businesses present. Highlighting this trend, Vista Equity Partners recently inked a deal to acquire B2B software magnate EngageSmart (ESMT)., in a transaction valued at roughly $4 billion.
Historically, both Silver Lake and Thoma Bravo—titans in the realm of tech-centric private equity investing—orchestrated SolarWinds' transition to a private entity in 2016, only to reintroduce it to public markets nearly three years subsequent. Collectively, these investment behemoths exercise control over approximately 68% of SolarWinds' common stock. The company's recent past was marred by a cyber onslaught in 2020, perpetrated by hackers allegedly affiliated with the Russian administration, compromising its product updates and potentially jeopardizing up to 18,000 customers.
This article was originally published on Quiver Quantitative