SoFi CEO enters prepaid forward contract on 1.5 million shares
SolarWinds Corp (NYSE:SWI), a $3.14 billion market cap company specializing in prepackaged software services and boasting an impressive 90.43% gross profit margin, has announced a significant step towards its acquisition by private equity firm Turn/River Capital, L.P. The company’s stock has shown strong momentum, delivering a 62.28% return over the past year. According to InvestingPro analysis, SolarWinds currently appears undervalued based on its Fair Value assessment. With the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 on March 10, 2025, one of the conditions for closing the merger has been satisfied.
The merger agreement, which involves SolarWinds, Starlight Parent, LLC, and Starlight Merger Sub, Inc., was first reported on February 7, 2025. SolarWinds, which generated revenue of $796.89 million in the last twelve months, is set to become a wholly owned subsidiary of Starlight Parent, LLC, following the completion of the merger. While the closing of the deal is still subject to other customary conditions, this recent development marks a clear progression towards finalization. InvestingPro subscribers have access to dozens more key metrics and insights about SolarWinds’ financial health, which currently rates as "Good" with an overall score of 2.96.
The merger is anticipated to be completed in the second quarter of 2025, pending the satisfaction of the remaining conditions detailed in the February 7 filing with the Securities and Exchange Commission (SEC).
This news comes amidst a series of forward-looking statements released by the company regarding the merger’s potential benefits and its impact on SolarWinds’ operations and stock price. However, SolarWinds has cautioned that these expectations are subject to various risks and uncertainties, including the possibility that the merger may not be completed as planned, or at all.
The company has outlined that disruptions to business relationships, the risk of legal proceedings, and the impact of the announcement on operating results are among the factors that could influence the merger’s outcome. Additionally, SolarWinds has noted that the merger could affect its ability to pursue certain business opportunities or strategic transactions during the pendency of the deal.
SolarWinds stockholders are advised to read all relevant documents filed with the SEC, including the upcoming Information Statement on Schedule 14C, which will provide more details about the merger once available.
The information in this article is based on a press release statement and filings with the SEC. For a comprehensive analysis of SolarWinds’ financial position and future prospects, including exclusive ProTips and detailed valuation metrics, check out the full company research report available on InvestingPro, part of our coverage of over 1,400 US stocks.
In other recent news, SolarWinds reported its third-quarter 2023 earnings, showcasing a 6% year-over-year increase in total revenue, reaching $200 million. The company also highlighted a 36% surge in subscription annual recurring revenue (ARR), with 94% of its total revenue now being recurring, indicating strong revenue stability. Additionally, SolarWinds announced its acquisition of Squadcast, aiming to enhance its IT incident response capabilities, which is expected to reduce mean time to remediation and improve operational resilience. In another significant development, Truist Securities raised its price target for SolarWinds to $18.50 from $13.00, following the company’s agreement to be acquired by Turn/River Capital. This acquisition is anticipated to close within the projected Q2 timeframe, with no expected antitrust hurdles. The company’s strategic focus on subscription-based services and recurring revenue has been a key driver of its robust performance. SolarWinds continues to expand its customer base, with 1,100 customers now contributing over $100,000 in total ARR, marking an 18% increase. The company also launched a new "SolarWinds Observability" platform, further enhancing its hybrid cloud solutions.
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