SolarWinds considers sale

SolarWinds Worldwide LLC, known for its observability software and victim of a cyberattack in 2020, is considering the possibility of its sale, as reported by Bloomberg citing people familiar with the matter. Controlled by Silver Lake Management and Thoma Bravo since it went public in 2009, the company is said to have already hired financial advisors to prepare the sale for early 2024. The information is unconfirmed.

Today, still responding to two lawsuits over the 2020 cyberattack, its market capitalization is around 1.5 billion dollars, significantly lower than its previous valuations. Malicious software updates distributed to users of the Orion product affected more than 18,000 of its 30,000 customers, including US government agencies, leading to a 23% drop in market capitalization when the breach was discovered. And 44% since the last round of capitalization in 2018, when it was worth $4.8 billion.

Despite the impact of the cyberattack on its share price, SolarWinds maintained steady, albeit modest, revenue growth. Following the attack, the company reported sales of 256.9 million dollars and its financial results for the third quarter of 2023 beat consensus revenue and earnings estimates. For fiscal year 2023, SolarWinds anticipates 3% year-on-year revenue growth and an 11% increase in EBITDA.

The exact amount at which SolarWinds aims to be acquired in the potential sale remains undisclosed. Given its revenue and profit growth, the company is expected to command a higher price than its current value.

Led today by President and CEO Sudhakar Ramakrishna, who joined the company in 2021 after the widely publicized hack, SolarWinds’ financial position is acceptable, with ample liquidity, a reasonable amount of long-term debt, but a strong positive free cash flow.

Its main offers include:

• Monitoring
• Observability
• Service management
• Systems Management
• Database management
• IT security