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Thoma Bravo agrees $6.9 billion deal for cybersecurity group SailPoint

US private equity group Thoma Bravo is buying cybersecurity firm SailPoint Technologies for $6.9 billion, the latest in a series of deals that signal the leveraged buyout market is returning after a pause amid rising volatility and the… war in Ukraine comes back to life.

Thoma Bravo, who manages more than $100 billion in assets, will pay $65.25 per share for SailPoint, two people with direct knowledge of the details told the Financial Times. The deal is set to be announced later Monday morning.

Texas-based company SailPoint is used by businesses to provide employees with secure access to remote work software and to protect cloud computing infrastructure from hackers.

The purchase price is 31.5 percent premium to the closing price of SailPoint shares on Friday and is Thoma Bravo’s second investment. The group first bought SailPoint in 2014 and listed it on the New York Stock Exchange three years later. It left its holding at the end of 2018, the filings show.

Monday’s acquisition underscores increased takeover interest from private equity buyers, particularly in the software sector, which sold off sharply earlier in the year.

Thoma Bravo and SailPoint declined to comment.

In March, Thoma Bravo agreed $10.7 billion acquisition of enterprise software company Anaplan, the first major takeover since Russia invaded Ukraine in late February.

Elliott Management has also spearheaded two large private-equity-backed deals this year that saw software company Citrix privatized and bought along with Vista Equity Partners for $16.5 billion in January TV rating company Nielsen for $16 billion with Canadian group Brookfield late last month.

Private equity groups in the US have been able to raise billions in traditional bank financing or from private lenders despite rising geopolitical risks, inflation and the prospect of higher interest rates.

A consortium led by Advent International and Permira Advisers completed the $14 billion acquisition of cybersecurity firm McAfee in early March, raising billions from bank lenders as markets plummeted in the days after Russia invaded Ukraine.

To acquire Anaplan, Thoma Bravo sidestepped bank lenders, instead raising financing from a group of private lenders led by Owl Rock, Blackstone, Apollo Global and Golub Capital.

Those with knowledge of the transaction said funding for SailPoint will also come from private lenders, including some who funded the Anaplan acquisition.

Private equity groups had their strongest start to the year ever in the first quarter, using huge piles of cash accumulated during the pandemic. According to Refinitiv data, there were $288 billion in private equity-backed transactions, up 17 percent compared to the first three months of 2021.

Bankers and lenders have also told the FT that they have seen a sharp surge in private equity deal activity in recent weeks.

However, the private equity buyout market is the whole deal market slowed down sharply this year. Transactions worth just over $1 trillion were completed in the first quarter, down 23 percent from the same period last year.

https://www.ft.com/content/ac996df1-497c-42ae-a0a6-71a7595aab4a Thoma Bravo agrees $6.9 billion deal for cybersecurity group SailPoint

Adam Bradshaw

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