SolarWinds IPO: IT Management Software Company Closes Slightly Above Debut Price

By Amit Chowdhry ● October 21, 2018

Austin, Texas-based IT management software company SolarWinds went public on Friday, October 19th after pricing 25 million shares at $15 per share. SolarWinds’ stock is now trading on the New York Stock Exchange with the ticker symbol “SWI.” The lead underwriters for the deal included Goldman Sachs, J.P. Morgan Securities, Morgan Stanley, and Credit Suisse Securities. And SolarWinds’ pre-IPO backers were Thoma Bravo and Silver Lake.

SolarWinds’ shares opened 2.7% above its IPO pricing to $15.41. After a few dips, SolarWinds’ ended the day up 0.20% at $15.03. And SolarWinds CEO Kevin Thompson told Business Insider that he is proud that the company was able to pull off the IPO despite the current climate. Thompson said that SolarWinds may be one of the only software companies that could have pulled off an IPO in the last two weeks because its model is proven with over $800 million in revenue and over $365 million in EBITDA.

Initially, SolarWinds was planning to sell 42 million shares priced at between $17 and $19. But then the offering was amended to 25 million shares at $15 the day before the IPO.

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What does SolarWinds’ do? The company is a provider of affordable IT infrastructure management software. For example, SolarWinds’ products provide organizations worldwide with the tools necessary to monitor and manage the performance of IT environments in the cloud or in hybrid models.

SolarWinds also engages with technology professionals — whether they work in IT operations, DevOps, and managed service providers (MSPs) — to better understand challenges they face in the maintenance of high-performing IT infrastructures. And these insights are shared in SolarWinds’ THWACK online community.

SolarWinds has long-term debt of approximately $2.2 billion. And proceeds from the IPO will be used to pay down some of the debt.

This is actually SolarWinds’ second IPO. In October 2015, SolarWinds was taken private in a deal valued at $4.5 billion. In the last several years, SolarWinds acquired several companies such as Loggly and Trusted Metrics.

In the first six months of 2018, SolarWinds revenue hit $398.6 million, which is up 17% from a year earlier. But the company reported a net loss of $86.9 million for the same period, up from $45.7 million a year before.

One of the biggest highlights of SolarWinds’ IPO was the fireworks. At 7:30 AM before the IPO, SolarWinds set off fireworks on Wall Street in New York, which is a first for the New York Stock Exchange. Here is a tweet Matthew Kobach (Manager of Digital and Social Media Intercontinental Exchange) shared from the event: