(Reuters) -SolarWinds said on Friday it has entered into a deal with private equity firm Turn/River Capital to take the IT management software firm private for an enterprise value of approximately $4.4 billion.
Shares of the Austin-based company were up about 22% in early trading.
Debt-funded buyouts are expected to rebound this year as borrowing costs decline, enabling private equity firms to finance deals cheaply and complete more acquisitions.
Some of the world’s largest buyout firms, including Blackstone, have begun pursuing large debt-funded acquisitions as the financing outlook improves.
According to the terms of the deal, Turn/River Capital will pay SolarWinds shareholders $18.50 per share in cash, representing a premium of about 23.1% from its last closing price, and will be debt-funded. The deal is expected to close in the second quarter.
The go-private transaction has an equity value of $3.16 billion, according to Reuters calculations.
Thoma Bravo and Silver Lake — which collectively hold approximately 65% of the outstanding voting securities of SolarWinds — have approved the transaction by written consent.
(Reporting by Rishi Kant in Bengaluru; Editing by Krishna Chandra Eluri)
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