Ping Identity to Go Private in $2.8B Thoma Bravo AcquisitionThoma Bravo-Ping Deal Comes Just Four Months After Thoma Agreed to Buy SailPoint
Thoma Bravo is doubling down on identity, inking a deal to buy Ping Identity for $2.8 billion just four months after agreeing to purchase SailPoint.
The proposed acquisitions mean that private equity giant Thoma Bravo will have both Ping's identity and access management and SailPoint's identity governance skill sets under its umbrella. The deal to take Ping private comes less than three years after Ping completed a New York Stock Exchange initial public offering that raised $187 million on a $1.2 billion valuation (see: Ping Identity Debuts $50M Venture Fund to Back IAM Startups).
"This compelling transaction is a testament to Ping Identity's leading enterprise identity solutions," Ping Identity CEO Andre Durand says in a statement. "We are pleased to partner with Thoma Bravo, which has a strong track record of investing in high-growth cloud software security businesses and supporting companies with initiatives to turbocharge innovation and open new markets."
Under the terms of the deal, shareholders of Denver-based Ping will receive $28.50 per share in cash, representing a 63% premium over the company's closing share price on Tuesday. The company's stock is up $10.48, or 60%, to $27.95 in premarket trading Wednesday. That's the highest Ping Identity's stock has traded since April 21. The Thoma Bravo-Ping deal is expected to close in the fourth quarter of 2022.
The transaction doesn't include a "go-shop" period, which would have allowed Ping's board to terminate the proposed acquisition by Thoma Bravo and move forward with a better proposal from another suitor should an offer materialize. Vista Equity Partners owns 9.7% of Ping's outstanding shares and has agreed to vote its shares in favor of Thoma Bravo's transaction.
"Ping Identity's unique capabilities and strong position in enterprise identity security make it a great platform to deliver customer outcomes, expand into new use cases and support digital transformation," Thoma Bravo Managing Partner Seth Boro says in a statement. "We are highly impressed with the talented Ping Identity team and look forward to working collaboratively in the years to come."
Sales Tumble, Losses Mount for Ping
Ping also disclosed Wednesday that revenue for the quarter ended June 30 fell to $72 million, down 8.7% from $78.9 million a year earlier. That missed Seeking Alpha's sales projection of $73.3 million. The company recorded a non-GAAP net loss of $28.6 million, or $0.34 per share, down from net income of $9.6 million, or $0.11 per share, a year earlier. Seeking Alpha was expecting a net loss of $0.12 per share.
Thoma Bravo often keeps portfolio companies with overlapping capabilities separate, with Barracuda and Sophos maintaining independent organizations under Thoma even though both sell technologies such as network and email security to small and midsized businesses. Neither Thoma Bravo nor Ping Identity immediately responded to an Information Security Media Group request for additional comment.
Ping Identity has expanded aggressively in recent years via acquisition. The company in September 2021 bought Singular Key for $73.2 million to streamline the creation of workflows across multiple identity technologies and platforms. Three months earlier, Ping Identity purchased bot detection and mitigation startup SecuredTouch for $39.9 million to provide early visibility into potential malicious activity.
In November 2020, Ping Identity bought dynamic authorization vendor Symphonic Software, which protects APIs, data, apps and resources, for $28.8 million. A month before that, the company purchased startup ShoCard, which allows users to collect and store personal identity information on their phone and then unlock and share that information using facial or fingerprint biometrics, for $5.5 million.
"Our shared commitment to growth and innovation, combined with Thoma Bravo's significant security software investing and operational expertise, will enable Ping Identity to accelerate its cloud transformation and delivery of industry-leading identity security experiences for the customers, employees and partners of large enterprises worldwide," Thoma Partner Chip Virnig says in a statement.
Aside from Vista Equity Partners, which agreed to acquire Ping in June 2016 for a reported $600 million, no institutional investor owns more than 5% of Ping Identity's outstanding shares, according to filings with the U.S. Securities and Exchange Commission. Durand, who founded Ping in 2001, owns 1.8% of outstanding shares.
"This transaction is a great outcome, and one we firmly believe maximizes value for all stakeholders," Ping Chairman and Vista Senior Managing Director Michael Fosnaugh says in a statement. "We wish Andre and the entire Ping Identity team continued success and thank them for their commitment and partnership over the last six years."
Thoma Bravo's Recent Cybersecurity Moves
Thoma Bravo had been very active in the cybersecurity space recently, buying SIEM vendor LogRhythm in July 2018, application and data protection vendor Imperva for $2.1 billion in October 2018, SMB security stalwart Sophos for $3.82 billion in October 2019 and email security vendor Proofpoint for $12.3 billion in August 2021, and agreeing to buy identity governance firm SailPoint in April for $6.9 billion.
The private equity firm in April 2022 agreed to sell Barracuda Networks to KKR for a reported $4 billion. Thoma Bravo first took the SMB platform security vendor private for $1.6 billion in February 2018.
Thoma Bravo in March 2022 sold a majority stake in Veracode to TA Associates in a deal valuing the application security vendor at $2.5 billion. Thoma Bravo first bought Veracode in November 2018 for $950 million following Broadcom's purchase of CA Technologies, which at the time owned the firm.
The firm bought a controlling stake in identity management vendor Centrify in July 2018 and three months later unveiled plans to spin the company's Identity-as-a-Service business into a stand-alone operation called Idaptive. Thoma Bravo sold Idaptive to Centrify rival CyberArk in May 2020 for $70 million and sold Centrify to TPG in January, when the company merged with Thycotic to form Delinea.