SolarWinds to be taken private in $4.5 bln deal: Reuters

(Reuters) IT management software maker SolarWinds Inc said it agreed to be taken private by investment firms Silver Lake Partners and Thoma Bravo LLC for $4.5 billion.

The offer of $60.10 per share represents a premium of 19.7 percent to SolarWinds’ Tuesday closing price.

SolarWinds’ shares rose to $58.76 in early trading.

SolarWinds said on Friday that it was exploring strategic alternatives after Reuters reported that the company was in talks to sell itself.

There has been a flurry of enterprise software companies going private in the last few years, including Informatica Corp, Tibco Software, Compuware and BMC Software.

Based in Austin, Texas, SolarWinds provides IT infrastructure management software to small businesses, government agencies and educational institutions worldwide. It competes with IBM Corp, CA Inc and Cisco Systems Inc.

Donald Yonce, with a 12.7 percent stake, is the biggest investor in the company. The Vanguard Group Inc owns 5.6 percent while BlackRock Institutional Trust Company NA owns 5.5 percent, according to Thomson Reuters data.

SolarWinds said in July that it faced challenges in its licensing business. It also lowered its annual revenue outlook, which drove down its shares and prompted several research analysts to lower their price targets on the company.

The deal is expected to close in the first quarter of 2016.

J.P. Morgan Securities LLC is advising SolarWinds while DLA Piper LLP (US) is its legal adviser.

Kirkland & Ellis LLP is serving as legal adviser to Thoma Bravo and Ropes & Gray LLP is serving as legal adviser to Silver Lake.

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