UPDATED Oct. 21, 2015: Silver Lake Partners and Thoma Bravo acquired SolarWinds and N-able for $4.5 billion.
Previous report from Oct. 12, 2015: Private equity firms exploring a pototential SolarWinds buyout include Hellman & Friedman, Vista Equity Partners and Thoma Bravo, according to Bloomberg. Additional bidders may emerge. Final bids are due by the end of October 2015, Bloomberg reported.
SolarWinds on Oct. 9 confirmed that it's exploring strategic alternatives for the company -- i.e., Wall Street jargon for a potential company sale. SolarWinds said initial buyout interest involved unsolicited inbound offers. Amid the potential buyout, SolarWinds stock has climbed in recent days.
SolarWinds, historically speaking, has mostly targeted corporate IT managers and administrators who need to more effectively manage infrastructure and applications. But over the past year or two, SolarWinds has gradually worked more closely with MSPs (managed services providers) and small businesses -- especially following the 2013 buyout of N-able.
Who Will Bid to Buy SolarWinds?
Each of the three potential bidders for SolarWinds already owns a range of technologies that could align well with the buyout. They include:
- Hellman & Friedman: Although the company has offices in San Francisco and New York, keep an eye on the London branch. Hellman & Friedman has extensive experience helping businesses to accelerate sales in Europe.
- Thoma Bravo: Current IT management investments include Attachmate, CompuWare, DelTek, Dynatrace, Embarcadero, Empirix, InfoVista, Keynote Systems, LANDesk, Riverbed, SailPoint, Sirius Computer Solutions and Vision Solutions:
- Vista Equity Partners: Existing investments include Autotask and Tibco, in particular.
Still, additional bidders could emerge before the end-of-October deadline. In particular, ChannelE2E is curious to see if Insight Venture Partners (owner of Kaseya also has a stake in LogicNow), Silver Lake Partners (owner of Dell) or Summit Partners (owner of Continuum Managed Services) makes a bid for SolarWinds.
Will Business Combinations Really Happen?
Also of note: Even if one of the private equity firms listed above buys SolarWinds ands its N-able business, that doesn't mean the businesses will be merged with existing portfolio companies (such as Autotask at Vista Equity Partners; Kaseya at Insight; or Continuum at Summit).
In fact, I suspect there's only a small chance of such an M&A combination occurring -- especially since SolarWinds is larger than most of the other software and cloud players I've mentioned above, generating more than $100 million per quarter in revenue.
And don't forget: SolarWinds and Autotask potentially compete on some fronts. SolarWinds recently added some ticketing capabilities to N-able's platform -- a potential move against Autotask and ConnectWise. And on the flip side, Autotask last year acquired CentraStage -- an RMM provider that competes with SolarWinds N-able on some fronts.