SolarWinds has officially been acquired by private equity firm Turn/River Capital. The $4.4 billion deal, which was first announced in February, was finalized yesterday, right on schedule with the prediction made earlier this year.
The deal closed at about $4.4 billion, with SolarWinds shareholders getting $18.50 in cash for each share they owned. Now that everything’s finalized, SolarWinds stock has stopped trading, and the company has been removed from the New York Stock Exchange.
Leadership optimistic about private future
“With Turn/River as our new owner, we remain committed to continuing our tradition of helping customers transform their businesses through simple, powerful, and secure solutions for hybrid and multi-cloud environments,” said Sudhakar Ramakrishna, president and CEO of SolarWinds. “We are excited to provide operational resilience on our SolarWinds Platform by utilizing our observability, monitoring, and service desk solutions.
Ramakrishna goes on to say that the acquisition marks an important milestone for the company.
“This successful transaction and partnership highlight our employees’ exceptional work in building solutions and delivering customer success,” Ramakrishna added. “We believe Turn/River’s expertise will help SolarWinds drive innovation and deliver greater value to customers and stakeholders.”
Matthew Amico, partner at Turn/River Capital, expressed enthusiasm about the acquisition, noting that SolarWinds has recently launched next-generation solutions that combine observability, incident response, service management, and AI-powered automation.
“We are excited to partner with SolarWinds to build on this momentum, investing further in product innovation and empowering organizations worldwide to thrive in an era of rapid technological change,” said Amico.
Several financial institutions were involved in the transaction. Goldman Sachs led as SolarWinds’ primary financial advisor, with Jefferies also providing financial guidance. DLA Piper served as SolarWinds’ legal counsel. On Turn/River’s side, J.P. Morgan, Barclays, Santander, and RBC Capital Markets acted as financial advisors, while Kirkland & Ellis handled legal matters.
PE eyes long-term growth for tech firms
Increasingly, we see private equity firms acquiring established tech companies and taking them private. When firms like Turn/River invest in companies such as SolarWinds, they effectively relieve the pressure of reporting earnings, enabling the company to concentrate on long-term growth and scaling.
PE firms are increasingly focusing on established software companies that have reliable revenue but may not be performing well on the stock market. When these investors get involved, they provide significant support to the company’s growth, aiming to eventually sell that company for a profit.
In SolarWinds’ case, being privately owned provides them more breathing room to develop their products and concentrate on long-term plans.
Discover how another company, Omega Systems, is leveraging private equity investment to drive growth and innovation in managed IT and compliance services.