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Cybersecurity specialist SailPoint’s preliminary public providing is poised at hand buyers a multibillion-dollar windfall from a personal fairness deal struck on the top of a report wave of takeovers in 2021 and 2022.
US non-public fairness group Thoma Bravo stands to make greater than $4bn from the upsized IPO, which raised virtually $1.4bn and valued the Texas-based firm at greater than $12bn.
The sum would characterize a big paper achieve from a takeover many non-public fairness buyers had frightened was struck at a sky-high valuation that will be weighed down by falling tech valuations.
Thoma Bravo paid $6.9bn for SailPoint in April 2022, about 15 occasions annual gross sales for a corporation that was barely worthwhile on the time.
Fears concerning the deal’s lofty valuation had been accentuated by surging inflation in 2022 that compelled the Federal Reserve to boost rates of interest to greater than 5 per cent.
The markedly completely different atmosphere wreaked havoc on the non-public fairness business, which has returned minimal quantities of money to its buyers lately as markets for brand new listings have seized up and merger exercise has slowed.
Many analysts anticipated non-public fairness teams reminiscent of Thoma Bravo, which manages $160bn in property and was among the many most lively dealmakers in 2021, can be compelled to carry their investments for longer to justify their buy worth. SailPoint’s annualised recurring revenues have roughly doubled to greater than $800mn since Thoma Bravo’s buyout, in response to filings.
Thoma Bravo used about $6bn of its buyers’ money to purchase SailPoint. In December 2024, it invested an extra $600mn to pay down SailPoint’s debt in an effort to extend the corporate’s attraction to shareholders. The deal raised Thoma Bravo’s general fairness funding to $6.6bn.
SailPoint bought 60mn shares to buyers at $23 a share, in response to an organization assertion late on Wednesday, having earlier marketed 50mn shares for between $19 to $21 apiece. At SailPoint’s new worth vary, Thoma Bravo’s features stand to be greater than $4bn. SailPoint’s shares rose 0.2 per cent shortly after they started buying and selling on Thursday afternoon in New York.
Nonetheless, since it isn’t promoting inventory as a part of the providing, the windfall has not been realised and can be uncovered to SailPoint’s efficiency on public markets.
SailPoint will use proceeds of $1.38bn to repay nearly all of its excellent debt.
Chief govt Mark McClain instructed the Monetary Occasions that SailPoint’s identification safety applied sciences had proved resilient regardless of a spending downturn in Silicon Valley in 2022 and 2023. It additionally moved some US jobs overseas to chop bills.
SailPoint’s revenues and adjusted income have been bolstered by safety upgrades demanded by rising synthetic intelligence use.
Buoyant inventory markets and easing monetary situations imply bankers anticipate a flurry of listings within the coming months, pushed partially by non-public fairness teams seeking to offload a few of their largest holdings acquired when rates of interest had been near zero.
However the yr has begun slowly for dealmaking and IPOs. Shares in US liquid pure fuel exporter Enterprise International, as an example, are down virtually 40 per cent for the reason that firm’s debut in mid-January.
SailPoint’s IPO is being intently watched as a helpful gauge of investor urge for food for tech listings after DeepSeek’s cut-price synthetic intelligence breakthrough shocked markets final month.
“Everybody was anticipating the market to be fabulous underneath a Republican administration, however it hasn’t gone to plan to this point,” stated an individual near the IPO for house and defence contractor Karman Holdings. Its shares surged 31 per cent on its inventory market debut on Thursday.