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Private Equity Investors To Buy SolarWinds for $4.5 Billion

IT systems management provider SolarWindows this week agreed to be acquired for a healthy $4.5 billion by private equity investors Silver Lake Partners and Thoma Bravo. That's a 44% premium over the company's share price as of Oct. 8, which was right before the company disclosed it was approached by an unsolicited bidder.

At the time, the company acknowledged that it had retained J.P. Morgan as its financial advisor and DLA Piper LLP to provide legal counsel. That's a nice payday for SolarWinds investors. But what does that mean for SolarWinds customers?

"Becoming a private company will provide SolarWinds with optimal operating flexibility to execute on its long-term strategy of providing superior products for IT and Dev Ops Pros all over the world," said SolarWinds President and CEO Kevin Thompson, in a statement. "We are extremely excited about partnering with Silver Lake and Thoma Bravo in the next chapter of the SolarWinds story."

Indeed at this week's DellWorld conference in Austin, Texas, ironically where SolarWinds is based, Dell Founder and CEO Michael Dell talked up the benefits of being a private company. "No 90 day shot clock," Dell said in his keynote address, referring to pressure on public companies to meet quarterly growth expectations. He also added that the company is now able to focus on customer-oriented initiatives and focus R&D accordingly.

SolarWinds is a popular provider of systems management tools for Windows and VMware environments. It has also extended into hybrid cloud management and entered the managed services provider business with the 2013 acquisition of N-able.

The deal, pending shareholder and regulatory approval, is slated to close next quarter.

Posted by Jeffrey Schwartz on 10/23/2015 at 11:08 AM


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