SailPoint To Be Acquired by Private Equity Firm Thoma Bravo for USD6.9B

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On Monday, April 11, 2022, identity management and governance (IMG) vendor SailPoint announced that it was being bought by private equity (PE) firm Thoma Bravo for $6.9 billion.

This is not the first rodeo for Thoma Bravo with SailPoint; in 2014, the PE firm bought out SailPoint’s original venture capital investors and remained an owner until SailPoint’s IPO in 2017.

Forrester believes the following factors were behind this deal:

  • SailPoint’s leadership is ready to rekindle old friendships with Thoma Bravo — especially since Thoma Bravo has ample capital to invest in SailPoint. Thoma Bravo purchased SailPoint for a solid 50% premium, meaning SailPoint was able to deliver quick value and returns to its shareholders.
  • Thoma Bravo provides capital and resources to help SailPoint expand into other identity and access management (IAM) areas to gain more wallet share from IAM buyers. While SailPoint faces stiff competition from Omada, One Identity, Saviynt, and other vendors in the IMG space, competing against CyberArk, Microsoft, Okta, Ping Identity, and others in the broader IAM suites market requires significant investment. With Thoma Bravo on board, it will be easier for SailPoint to pursue this strategy if necessary.
  • SailPoint’s cloud strategy is still evolving (SailPoint has previously acquired smaller cloud infrastructure entitlement and cloud security posture management vendors such as Orkus and OverWatchID): While Forrester estimates that SailPoint’s software-as-a-service (SaaS) offering, IdentityNow, accounts for around 50% of SailPoint’s annual revenue, SailPoint’s SaaS business is their primary revenue growth engine going forward. Thoma Bravo’s investment is a validation of the importance of SaaS for IMG and should help SailPoint further drive their SaaS revenue growth.
  • Thoma Bravo’s current security portfolio contains other companies that could complement the SailPoint offering to build a broader cloud-centric identity security platform. The PE could combine SailPoint with components from existing portfolio companies such as Delinea (formally known as Centrify: privileged IAM), Venafi (machine identity management), and certain cloud security capabilities from Illumio and Imperva into a new cloud-centric identity company that could emerge as a private company, reenter the public markets via an IPO, or be sold to another large enterprise software provider. This is a definite possibility with SailPoint back under Thoma Bravo’s control.

What does Thoma Bravo buying SailPoint mean:

  • SailPoint customers are unlikely to see any short-term drastic changes, but Forrester expects bundled new product offerings to appear (such as access management plus IMG) and (as is usually the case) higher prices.
  • Thoma Bravo will likely invest more into SailPoint’s cloud security posture management (CSPM) and SaaS security posture management (SSPM) capabilities and integrate them into the SailPoint stack.
  • With meeting the quarter-over-quarter, year-over-year growth mandates dictated by Wall Street removed, Thoma Bravo will be able to increase innovation investments at SailPoint. Ultimately, this means better product features, product quality, and greater value for customers.

The original article by Andras Cser, Forrester's vice president and principal analyst, and Merritt Maxim, Forrester's vice president and research director, is here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/wildpixel