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Cybersecurity specialist SailPoint’s preliminary public providing is poised handy traders a multibillion-dollar windfall from a non-public 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 IPO, which is anticipated to worth the Texas-based firm at greater than $12bn.
The sum would characterize a big paper achieve from a takeover many non-public fairness traders had nervous was struck at a sky-high valuation that may be weighed down by falling tech valuations.
Thoma Bravo paid $6.9bn for SailPoint in April 2022, about 15 instances annual gross sales for an organization that was barely worthwhile on the time.
Fears concerning the deal’s lofty valuation have been accentuated by surging inflation in 2022 that compelled the Federal Reserve to lift rates of interest to greater than 5 per cent.
The markedly totally different atmosphere wreaked havoc on the non-public fairness trade, which has returned minimal quantities of money to its traders in recent times as markets for brand spanking 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 belongings 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 line with filings.
Thoma Bravo used about $6bn of its traders’ money to purchase SailPoint. In December 2024, it invested an additional $600mn to pay down SailPoint’s debt in an effort to extend the corporate’s attraction to shareholders. The deal raised Thoma Bravo’s total fairness funding to $6.6bn.
SailPoint inventory is being supplied to traders at $23 a share, in line with Bloomberg, up from a variety of $19 to $21. At SailPoint’s new worth vary, Thoma Bravo’s beneficial properties stand to be greater than $4bn.
Nonetheless, since it isn’t promoting inventory as a part of the providing, the windfall has not been realised and will probably be uncovered to SailPoint’s efficiency on public markets.
SailPoint will use proceeds of greater than $1bn to repay just about all of its excellent debt. The IPO has attracted anchor traders Dragoneer Funding Group and AllianceBernstein, which is able to buy about 20 per cent of the providing.
Buoyant inventory markets and easing monetary circumstances 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 greatest holdings acquired when rates of interest have been near zero.
However the yr has begun slowly for dealmaking and IPOs. Shares in US liquid pure gasoline exporter Enterprise World, as an illustration, are down nearly 40 per cent because the 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, but it surely hasn’t gone to plan thus far,” stated an individual near the IPO for house and defence contractor Karman Holdings, which can also be anticipated to begin buying and selling this week.
Karman has set a valuation vary of $18 to $20 a share for a $400mn IPO, implying a totally diluted market capitalisation of $2.5bn.
