Thoma Bravo picks up Ping Identity for $2.8 billion in all-cash deal – TechCrunch

After a tough few months in the Ping Identity markets, the enterprise identity management company today announced a big step forward: private equity firm Thoma Bravo is buying the business and taking it private for 2 .8 billion dollars.

The news was announced at the same time as Ping released its second quarter results. The company said it posted revenue of $72 million for the quarter, missing analysts’ expectations. (He canceled his earnings call in light of news of the acquisition.)

Ping is listed on the NYSE (it went public before the pandemic) and Thoma Bravo will pay $28.50 per share in an all-cash transaction, 63% above Ping Identity’s closing share price on August 2, 2022the company said.

“This compelling transaction is a testament to Ping Identity’s leading enterprise identity solutions, our talented team, and our exceptional customers and partners,” said Andre Durand, CEO of Ping Identity, in a statement. “Identity security and seamless user experiences have become essential in the digital economy and Ping Identity is better positioned than ever to capitalize on the growing demand from modern enterprises for robust security solutions. We are delighted to partner with Thoma Bravo, who has a strong track record of investing in high-growth cloud software security companies and supporting businesses on initiatives to drive innovation and open new markets.

This is actually the second time that Ping has passed through the hands of a private equity firm. Prior to going public, it was majority owned by Vista Equity. Vista retained a stake in the company, currently 9.7% of its outstanding shares.

Thoma Bravo is part of the group of private equity firms that has aggressively acquired technology companies in recent months capitalizing on the current climate. Companies targeted include those that have struggled to perform well in public markets, those that struggle to scale and raise funds in later cycles, and those that had planned to go public but were unable to do so. . to market conditions and the general coolness of the IPO market. Other large corporate IT deals that Thoma Bravo has been involved in include the purchase of SailPoint for $6.9 billion and Anaplan for $10.7 billion.

Identity management remains a very hot area in the world of enterprise IT, given the increasing number of cyberattacks and breaches launched by hackers maliciously entering networks through credential stuffing and other tactics that exploit weaknesses in login procedures.

Ping missed analysts’ estimates at a time when many other tech companies are struggling to meet the numbers – a collective sign of a broader market slowdown and the pressure it’s putting on software makers, SaaS companies in particular are facing volatility.

All the same, Ping is showing some growth. It noted that in the quarter that ended June 30, it had annual recurring revenue of $341 million, up 22% from the same quarter a year ago, with an ARR SaaS to $100 million, which Ping described as 30% of the “end ARR total.” “Subscriptions make up the majority of Ping’s revenue, and last quarter it was $66.3 million, or 92% of all revenue, with SaaS at $22.7 million (vs. 13. $4 million a year ago). Another key metric for the company was the number of highest value users. Ping ended the quarter with 331 enterprise customers “with over $250,000 in ARR,” up 19% from a year ago.

However, the killer of Ping is that even though he grew up, he wasn’t fast enough. It was in a difficult spiral, and given the state of capital markets today, Ping may have run out of options to raise funds as an independent company to strengthen itself for more than growth and profitability. He noted that “unleveraged free cash flow” was actually negative $8.4 million for the last six months ended June 30 (meaning: no money and actually a debt). A year ago, at the same time, it was $34.5 million (that’s a positive number).

“A tectonic shift is occurring in intelligent identity solutions for the enterprise,” said Seth Boro, managing partner at Thoma Bravo, in a statement. “Ping Identity’s unique capabilities and strong position in enterprise identity security make it an excellent platform to deliver customer results, expand into new use cases and support digital transformations. We are very impressed with the talented team at Ping Identity and look forward to working together in the years to come.

Ping’s board unanimously approved the deal, the two companies said. The deal, pending regulatory and other approvals, is expected to close in the fourth quarter.

More soon.