Thoma Bravo to Acquire SailPoint (SAIL) for $6.9 Billion, Analyst Sees More Cyber M&A Coming

April 11, 2022 6:58 AM EDT
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Private equity firm Thoma Bravo has agreed to acquire cybersecurity business SailPoint Technologies (NYSE: SAIL) for $6.9 billion, marking another deal that indicates a sharp recovery in the buyout market.

Under the terms of the deal, the U.S. private equity firm is set to pay $65.25 a share for SailPoint. Thoma Bravo will pay a 31.5% premium to SailPoint’s Friday closing price.

The deal marks the second time Thoma Bravo has invested in SailPoint after the PE firm had bought a stake in the cybersecurity company in 2014 before it made an exit in 2018.

“Identity security is core to cyber security and businesses have realized that to fuel business growth and success, they must start with identity as the foundation for secure business transformation. We've experienced rapid growth and see a tremendous opportunity ahead of us to continue to set the pace in the identity security market as the category leader,” said Mark McClain, CEO and Founder, SailPoint.

The deal is the latest addition to the takeover frenzy in the software industry, after a number of software makers have been sold to private equity buyers.

Last month, Thoma Bravo also bought cloud-based business software company Anaplan (NYSE: PLAN) for 10.7 billion, the first major deal after Russia’s invasion of Ukraine.

In January, affiliates of Elliott Management and Vista Equity Partners agreed to buy cloud computing company Citrix (NASDAQ: CTXS) for $16.5 billion. Elliot Management also acquired television rating company, Nielsen (NYSE: NLSN), for $16 billion.

Furthermore, cyber security software maker McAfee was taken private by a consortium managed by Advent International and Permira Advisers for $14 billion.

Private equity and investment firms have raised billions through traditional bank funding or private lenders, in spite of record inflation and the potential interest rate hike. To fund its buyout of Anaplan, Thoma Bravo secured the capital from a group of private lenders managed by Owl Rock, Blackstone, Apollo Global, and Golub Capital.

Its acquisition of SailPoint will also be funded by private lenders, some of which have participated in the buyout of Anaplan, according to the Financial Times. The transaction is expected to close in the second half of 2022.

Wedbush analyst Daniel Ives says that the SAIL acquisition is a smart strategic move for Thoma Bravo.

“Given the importance of cyber security in this macro-environment, we believe that this is a smart strategic move for Thoma Bravo to double down on cyber along with their prior acquisitions, following their purchase of Proofpoint Inc. last April for $12.3 billion, with the shift to remote working as well as the Russia- Ukraine conflict fueling major demand for security software firms. We believe cyber security spending will continue at an elevated level and we believe added growth tailwinds (and M&A, first Mandiant, now SAIL) for the cyber security sector are clearly abound,” Ives said.

He also indicated that he doesn’t expect any other bidders to emerge or regulatory hurdles for this acquisition.

By Senad Karaahmetovic

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