Grand Gestures

Image source: Dean Drobot - Shutterstock

What's going on?

Private equity (PE) company Thoma Bravo announced on Monday that it’s agreed to buy SailPoint, after realizing it was crazy to have ever parted ways with the cybersecurity firm.

What does this mean?

Thoma Bravo first bought into SailPoint – which provides secure remote working software and cloud computing protection – back in 2014, before sprucing it up, listing it on the US stock market three years later, and pocketing a profit. But with remote working now part of the furniture and the war in Ukraine driving a spate of cyberattacks, Thoma Bravo has decided it wants SailPoint back for good: the PE giant announced on Monday that it had agreed to buy the company in a deal worth $6.9 billion – over 30% more than SailPoint was worth before the deal was announced (tweet this).

Why should I care?

The bigger picture: PE firms go hard on software.
This marks Thoma Bravo’s sixth security-focused investment, and follows its $12.3 billion purchase of cybersecurity firm Proofpoint last year. But this deal also reflects the wider trend of PE firms buying into software companies: Brookfield, for instance, agreed to buy car dealership software provider CDK Global for $6.4 billion last week, while Elliott Management and Vista Equity Partners bought software giant Citrix for $17 billion earlier this year. They’re going cheap, after all: an index tracking some of the biggest business software companies has fallen more than twice as much as the wider US stock market this year.

Zooming out: SoftBank finds a diamond in the rough.
SoftBank’s been busy too: its Vision fund led a $185 million investment round in Pax8 on Monday – a move that values the cloud startup at $1.7 billion. SoftBank said it’s confident that the company – which helps small businesses manage cloud services – has the potential for long-term growth in a seriously competitive industry.

Originally posted as part of the Finimize daily email.

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