Good morning, and have a wonderful Monday! It’s TechCrunch’s Early Stage Week, which means I have some prep work to do. With that in mind, let’s take a quick look at SailPoint’s massive private equity takeover to see what it says about the value of technology firms. The sale of SailPoint takes place in the context of a shifting exit market for technology businesses in general. While worldwide M&A activity has remained constant in 2022 compared to last year, IPO and SPAC exits have dropped dramatically in the first quarter, according to exit statistics compiled by CB Insights. As a result, mergers and acquisitions are more vital than ever for tech exits, making the SailPoint purchase worthwhile.
SailPoint’s leaving is not a mercy-killing on a high level. The company’s stock price was essentially $50 per share when the sale was announced, down just slightly from its 52-week high of just over $63 per share; compared to many public technology businesses, that’s a fairly small value haircut from peak levels. SailPoint, which offers enterprise security products, will be acquired by Thoma Bravo for $65.25 per share in cash.
We’ll need to look at the company’s results to figure out why it’s selling and why Thoma Bravo is purchasing. This raises the question of how the firm is valued and what its price may signal for unicorns and other high-valued startups. This will be entertaining and quick! Let’s get started! In Q1’22, global venture capital financing totaled $143.9 billion, spread over 8,835 deals, down 19 percent from the previous quarter. Despite the decline, Q1’22 was the fourth-largest financing quarter ever.
The United States received roughly half of all financing, with Biotech Company Altos Labs, security analytics platform Securonix, and logistics unicorn Flexport, which was valued at $8 billion, receiving some of the largest deals in the area. Companies situated in the United States also accounted for a large percentage of the fundraising activity in Q1’22, accounting for 37% of all agreements.
Another day, another major private equity deal. It’s common knowledge that private equity companies are flush with cash these days and want to put it to good use by making acquisitions. Thoma Bravo paid over $11 billion for Anaplan last month. It announced today that it will purchase identity security provider SailPoint for $6.9 billion — and the drumbeat continues. Companies are trying to protect themselves against more sophisticated attacks, therefore cybersecurity is a prominent topic right now. That is why the industry is garnering billions of dollars in startup funding, as well as private equity companies jumping on board. This acquisition marks Thoma Bravo’s sixth security-focused company in its portfolio.