IT management, Mergers and Acquisitions

SolarWinds N-able Buyout FAQ: Hmmm…


As Silver Lake Partners and Thoma Bravo acquire SolarWinds and N-able for $4.5 billion, the software company has given employees an FAQ about the deal. The only challenge? The SolarWinds buyout FAQ, viewed by ChannelE2E, raises as many questions as it answers.

Here is the complete text of the FAQ, which surfaced as part of an SEC filing. ChannelE2E reactions and comments are in italics.

1. What was announced today?: 

  • SolarWinds, Inc. has entered into a definitive agreement to be acquired by Thoma Bravo and Silver Lake for $60.10 per share in cash, or a total equity value of approximately $4.5 billion.
  • At the conclusion of the transaction SolarWinds, Inc. will become a privately owned company.

2. Why did the Board decide to take the Company private?

  • The Board evaluated a full range of financial and strategic alternatives to maximize value for SolarWinds’ stockholders.
  • The Board unanimously determined that this offer is the best way to maximize value for our stockholders, providing immediate and substantial cash value, as well as a compelling 43.5% premium.
  • Additionally, as a private company, we expect SolarWinds to benefit from added flexibility and strong financial partners, which will allow us to be more focused on our long-term growth strategy.
  • ChannelE2E Reaction: SolarWinds is growing but not fast enough to please Wall Street. Going private makes sense for the reasons SolarWinds stated.

3. What needs to happen between now and close?

  • We expect to close in the first calendar quarter of 2016. The transaction is subject to approval from SolarWinds stockholders, regulatory approvals and other customary closing conditions.

4. What are the benefits of this transaction for SolarWinds employees?

  • As a private company, we expect to be able to take more of a long-term perspective on our business and strategy, ensuring a strong future for SolarWinds and its customers, partners and employees.
  • ChannelE2E Reaction: Makes sense.

5. Are there any immediate changes that Thoma Bravo and Silver Lake are expected to make? How will this affect the day-to-day operations at SolarWinds?

  • The transaction has not yet closed, but for now we expect things to remain business as usual.
  • As we approach the close of the deal, we will provide updates as they become available.
  • ChannelE2E Reaction: Translation -- stay focused on current quarter performance and execution. 

6. Will there be layoffs as a result of the transaction?

  •   Thoma Bravo and Silver Lake are focused on growing SolarWinds’ position as an IT management software leader.
  •  Thoma Bravo is a leading private equity firm focused on focus on application and infrastructure software and technology enabled services. Silver Lake is a global leader in technology investments whose portfolio includes leading technology and technology-enabled businesses.  Both firms focus on helping its companies achieve operational, product and customer service excellence by contributing professional expertise, proven best practices and management techniques.
  • As we approach the close of the deal, we will provide any material updates as they become available. Any operating changes will communicated as soon as possible.
  • ChannelE2E Reaction: The private equity firms are committed to growing SolarWinds. But... the statement above certainly is not an employment guarantee...

7. What changes should we expect when SolarWinds is no longer a public company?

  • For now we expect things to remain business as usual.

8. Question and answer appears to be missing from SEC filing, or perhaps the overall Q&A numbering is off.

9. Will my benefits package change when SolarWinds is no longer a public company?

  • We will provide more information in the months ahead.
  • ChannelE2E Reaction: Don't be shocked if benefits plans potentially change. 

10. Will the headquarters remain in the same location?

  •  SolarWinds will continue to be headquartered in Austin.
  • ChannelE2E Reaction: Finally, a 100 percent clear answer.

 11. Who do I go to with questions about this announcement?

  •  Please consult your VP or General Counsel.
  • ChannelE2E Reaction: Forward questions to legal? Hmmm... 

As part of the deal, SolarWinds mentioned a commitment to MSPs -- though I don't think the N-able business unit was mentioned by name.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.