TPG acquires Thycotic in $1.4bn deal

TPG Capital has agreed to acquire Thycotic from Insight Partners in a deal valued at $1.4 billion, sources familiar with the matter told PE Hub.

As part of the deal, TPG plans to combine Thycotic with Centrify, a company it bought from Thoma Bravo in January. The deal was signed on 1 March but has yet to close, the sources said.

Both Thycotic and Centrify provide modern privileged access management (PAM) technology to its clients.

PE Hub first reported in February that Insight Partners was working with Evercore on a sale process.

Thycotic, based in Washington, DC, is an IT security and password management technology provider that aims to empower companies to remove the complexities associated with proper access control and management of privileged accounts.

Thycotic’s Secret Server product is a fully featured PAM solution available both on premises and in the cloud. Thycotic is the fastest-growing company in the PAM market, having grown 40 percent year-over-year, one of the sources told PE Hub in February.

A $1.4 billion valuation translates into a 11.6x revenue multiple for Thycotic.

PE Hub previously reported that Thycotic generates $120 million in revenue, $100 million of which is annually recurring. Thycotic is nearly break-even on EBITDA, the sources said.

Broadly, IT security and PAM remain highly sought after verticals of PE investment.

TPG partner Tim Milikin called PAM “one of the most important and strategic sub-sectors of security software,” in a press release announcing the Centrify acquisition.

“As a result of the many accelerating IT trends – including faster digital transformation, accelerated cloud adoption, and agile DevOps practices – enterprises need to manage and protect more privileged accounts than ever before,” Milikin said.

TPG declined to comment. Insight Partners and Evercore did not respond to PE Hub’s requests for comment.