Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Cybersecurity specialist Sailpoint’s first public offer is poised to hand over investors billions of dollars of pimples from private equity deals that hit the heights of record-breaking waves of acquisitions in 2021 and 2022. Masu.
US private equity group Thoma Bravo is expected to make more than $4 billion from the Upsized IPO, raising nearly $1.4 billion and cherishing the Texas-based company for over $12 billion.
This total represents a massive paper gain from acquisitions that many private equity investors were concerned about. Sailpoint shares fell 4.3% on its disappointing market debut on Thursday.
Thoma Bravo paid Sailpoint $6.9 billion in April 2022, with about 15 times the annual revenue of the company, which was barely profitable at the time.
Fear of a noble valuation of the deal forced the Federal Reserve to rise to over 5% as it surged inflation in 2022.
The significantly different environment has wreaked havoc in the private equity industry. This has been returning minimal cash to investors in recent years as the market for new listings has been seized and merger activities have slowed down.
Many analysts manage $160 billion in assets and private equity groups like Thoma Bravo, who was one of the most active dealers in 2021, will hold their investment longer to justify the purchase price I was expecting I would be forced to do that. According to filing, since the acquisition of Thoma Bravo, Sailpoint’s annual recurring revenue has nearly doubled to over $800 million.
Thoma Bravo spent about $6 billion in investor cash to buy SailPoint. In December 2024, it invested an additional $600 million to pay Sailpoint’s debts to increase the company’s appeal to shareholders. The deal raised Thoma Bravo’s equity investment to $6.6 billion.
According to a statement from the company later Wednesday, Sailpoint sold 6 million shares to investors at $23 per share, and previously sold 5 million shares for $19 to $21. In Sailpoint’s new price range, Thoma Bravo’s profits are over $4 billion.
However, because they do not sell stock as part of their offering, Windfall is not realized and is exposed to Sailpoint’s public market performance.
SailPoint uses $1.38 billion in revenue to repay virtually all outstanding obligations.
Chief Executive Mark McClain told the Financial Times that despite sluggish spending in Silicon Valley in 2022 and 2023, Sailpoint’s identity security technology has proven resilient. .
Sailpoint revenue and adjusted profits are strengthened by security upgrades required by the increased use of artificial intelligence.
Recommended
Mitigating the buoyant stock market and financial situation means bankers are looking forward to mass listings in the coming months. This is driven in part by private equity groups trying to offload some of the largest holdings they have acquired when interest rates are near zero.
However, the year is slowly beginning for deal-making and IPOs. For example, shares in US Liquid Natural Gas Exporter Venture Global have fallen by almost 40% since its debut in mid-January. Automobile sharing company Turo on Thursday withdrew its plans to withdraw its list, saying it “is not currently hoping to offer securities.” The company initially submitted it for release in 2022.
Sailpoint’s IPO is being closely monitored as a useful gauge of investors’ desire for technology lists after a market that was surprised by the AI breakthrough of Deepseek’s cut price breakthrough last month.
“Everyone was hoping that the market would be great under the Republican administration, but so far they had no plans,” said someone near the IPO, who is a space and defense contractor. I said this for Kalman Holdings. The stock jumped 35.6% on its stock market debut on Thursday.
