When Silver Lake Partners and Thoma Bravo announced plans to acquired SolarWinds for $4.5 billion last week, anecdotal evidence suggested that SolarWinds' MSP software business was strategic to the deal. Now, several sources are reinforcing that point to ChannelE2E.
SolarWinds owns N-able and several other tools that managed services providers (MSPs) use to remotely monitor and manage customer networks. The N-able portfolio, which now includes trouble ticket and remote control capabilities, has helped SolarWinds to diversify beyond its IT pro user base and into the MSP market, which largely serves the SMB (small and midsize business) segment.
SolarWinds has been growing, but not as quickly as Wall Street expected. That prompted private equity firms to step forward and bid for the company. After spending a few days mulling its options, SolarWinds last week accepted a $4.5 billion buyout offer from Silver Lake Partners and Thoma Bravo. Prepared statements suggested that the buyers are committed to the N-able business. However, N-able representatives have been mum and unavailable to publicly comment on the deal.
All Together Now
Still, sources familiar with the buyout terms say it's "highly unlikely" that Silver Lake or Thoma Bravo would decouple N-able from SolarWinds. Moreover, the private equity firms respect N-able's business model and target market, the sources say. "This deal is about building up a company, not tearing it apart," said a source familiar with the negotiations that led up to the $4.5 billion buyout.
Meanwhile, executives in the MSP software market applaud the flow of "quality" private equity dollars into the sector. Continuum CEO Michael George, for instance, says Silver Lake and Thoma Bravo have strong reputations in the PE market. Both firms are known for investing in quality, he adds.
George is no stranger to the PE sector. He joined Continuum as part of Summit Partners' acquisition of the company in 2011.
The Silver Lake and Thoma Bravo buyout of SolarWinds is expected to be official in Q1 2016.
