Observability and IT administration software program firm SolarWinds shocked the IT neighborhood with final week’s announcement that it could go personal after a $4.4 billion acquisition by personal fairness agency Flip/River Capital.
Information of 2025’s biggest-so-far expertise deal was met with some skepticism by analysts and cybersecurity specialists, who fear concerning the Flip/River’s long-term plans and safety implications. SolarWinds was the sufferer of a historic nation-state cyberattack that rocked the business in 2021. Safety specialists fear what a transition to a privately held group will imply for transparency going ahead.
Will Townsend, vice chairman and principal analyst at Moor Insights & Technique took to X to counsel that the corporate’s large hack led to the sale. “Going personal by a PE is not any shock,” he wrote. “[SolarWinds] by no means did sufficient to reassure buyers and prospects that it had realized and applied measures to forestall that epic provide chain hack from taking place once more.”
However in a reside interview with InformationWeek, SolarWinds CEO Sudhakar Ramakrishna says it’s the corporate’s success even after the assault that drove Flip/River’s acquisition play that led to the blockbuster deal. SolarWinds most up-to-date monetary report reveals $200 million in income for the third quarter of 2024, a 6% year-over-year improve.
“In all probability probably the most important motive why Flip/River was drawn to us is the truth that we’ve continued making progress on the SolarWinds platform and proceed to make progress on each metric from a enterprise standpoint … when exterior buyers take a look at us, they’re clearly trying on the enterprise trajectory, which is unquestionable at this level,” he says.
SolarWinds prospects and companions ought to sit up for continued development, Ramakrishna says.
“Clients ought to anticipate us to ramp quicker improvements on our SolarWinds platform … with our deal with time to worth, time to remediate, and time to resolve, we’re making good progress organically on all three of these dimensions and we’ll be accelerating that progress.”
He says the corporate can even be bettering packaging and pricing. “Clients ought to expertise and anticipate every part from us that they’ve come to know and like about us. Hopefully, they need to get extra from us by way of how we give them options that speed up their enterprise transformation.”
Questions of Safety
How SolarWinds handles safety going ahead with the transition to a personal entity can be watched intently by the cybersecurity business. Brian Fox, co-founder and CTO of software program provide chain administration agency Sonatype, says the SolarWinds assault uncovered the extent of assaults on crucial provide chains.
“The SolarWinds hack completely showcased the rise of refined software program provide chain assaults, because it compromised high-profile networks, together with these of 9 US authorities companies,” Fox says in an electronic mail interview. “As SolarWinds charts a brand new path ahead, I can solely hope that classes realized … wouldn’t be forgotten amid the organizational change.”
SolarWinds’ Ramakrishna says the corporate desires to allay these safety considerations. “I believe it’s a well-placed worry … However as I have interaction with the Flip/River crew, one in all my essential emphases was on secure-by-design and the initiatives that I began again in 2021,” he says. “There’s a necessity for us to proceed to assist guarantee transparency with prospects, which then clearly results in belief. I don’t anticipate that to vary.”
The acquisition will value Flip/River $18.50 per share in an all-case deal. The acquisition value represents a 35% premium on SolarWinds’ 90-day common inventory value on the time of the deal.
“There may be broad pleasure,” Ramakrishna says. “Individuals inside the firm view this as an amazing validation for his or her work. The crew has labored tremendous arduous to get thus far, however we additionally notice that our jobs are by no means accomplished. We simply need to hold incomes the belief of our prospects and our companions each day. It’s enterprise as ordinary for us.”
The deal nonetheless wants regulatory approval and is anticipated to shut within the second quarter. Funding companies Thoma Bravo and Silver Lake, who maintain 65% of the excellent voting securities, authorized the acquisition together with SolarWinds’ board of administrators.