SolarWinds To Be Taken Private For About $4.5 Bln

(RTTNews) - Shares of SolarWinds Inc. (SWI) are gaining more than 16 percent in regular trades on Wednesday after the software maker said it has agreed to be acquired by private equity firms Silver Lake Partners and Thoma Bravo LLC for about $4.5 billion in cash. The announcement comes almost two weeks after the company said it was reviewing strategic alternatives.

Under the terms of the deal, SolarWinds stockholders will receive $60.10 per share in cash. The offer price represents a 19.7 percent premium to the company's closing stock price of $50.20 on October 20, Tuesday.

The transaction, which is expected to close in the first calendar quarter of 2016, is subject to approval by SolarWinds stockholders and regulators.

Austin, Texas-based SolarWinds provides network management software for IT administrators and smaller businesses. On October 8, the company confirmed that it was conducting a review of strategic alternatives after it received an unsolicited expression of interest.

Kevin Thompson, president and chief executive officer of SolarWinds said, "Becoming a private company will provide SolarWinds with optimal operating flexibility to execute on its long-term strategy of providing superior products for IT and Dev Ops Pros all over the world."

In July, SolarWinds reported a surge in profit for the second quarter from last year on double-digit growth in revenues. However, the company also provided a weak outlook for the third quarter and lowered its revenue guidance for the full year.

Silver Lake focuses on technology investments and has over $26 billion in combined assets under management and committed capital. The firm's portfolio of investments collectively generates more than $85 billion of revenue annually and employs more than 170,000 people globally.

Silver Lake's portfolio includes Alibaba Group, Avago, Avaya, Dell, Global Blue and Go Daddy, among other companies.

Thomas Bravo manages a series of private equity funds representing more than $8.5 billion of equity commitments.

For SolarWinds, J.P. Morgan Securities LLC is serving as financial advisor, while DLA Piper LLP (US) is serving as its legal advisor. Kirkland & Ellis LLP is serving as legal advisor to Thoma Bravo and Ropes & Gray LLP is serving as legal advisor to Silver Lake.

SWI is trading at $58.49, up $8.29 or 16.51 percent on a volume of 3.45 million shares.