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Unsolicited Suitor Leads SolarWinds to Consider Options

Popular systems management provider SolarWinds today said it is considering the outright sale of the company or other options, following an unsolicited inquiry by a third party.

After Reuters reported on the inquiry, SolarWinds acknowledged it has retained J.P. Morgan as its financial advisor and DLA Piper LLP to provide legal counsel, providing what the company described as a third party who expressed interest. It wasn't clear whether the third party made an outright offer to acquire SolarWinds or only wanted to discuss possible transaction. SolarWinds emphasized it's too early to determine whether the review will result in any type of transaction.

"Consistent with its duties, our board of directors has determined that it is prudent to undertake a review to see which alternative or alternatives, including our standalone plan, are the best way to maximize shareholder value," said SolarWinds CEO Kevin Thompson in a statement. "As the board conducts its review, we remain focused on strong revenue growth and cash flow and excited about continuing to deliver our world class products to help IT professionals manage all things IT."

A spokeswoman said the company had no further comment. The company's stock on Friday jumped 13.4% on the news and has a market cap of $3.6 billion. SolarWinds has been under pressure of late as it made its transition to cloud subscription models with lower than expected licensing revenues last quarter. The company had lowered its revenue guidance in July.

SolarWinds is a popular provider of infrastructure, network and management software and services as well as security, database support and IT help desk software. It is also the parent company of remote monitoring and management provider N-able.

 

Posted by Jeffrey Schwartz on 10/09/2015 at 1:45 PM


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