The Buyside

SolarWinds to Scour Overseas

The IT company’s $120M N-Able purchase follows 10 smaller acquisitions the company has made since its 2009 IPO

SolarWinds Inc. (NYSE: SWI) has been on a buying spree in the U.S. and Canada, completing 11 deals since going public in 2009. Next up is Europe and Asia, says chief executive Kevin Thompson. The Austin, Texas-based company is looking to position itself as an acquisitive developer of information technology management software. "We're looking at other markets for sure, with an opportunity to grow faster outside of the U.S."

Thompson cites Germany, Japan or China as the likely markets SWI will head to next. In the meantime, SWI will remain busy tallying up targets across North America having recently paid $120 million for N-Able Technologies, an Ottawa, Canada-based provider of cloud services for remote monitoring. The transaction, SWI's largest to date, builds on the company's offerings for small businesses.

Among SWI's most notable acquisitions is Dallas-based Tek-Tool, a developer of storage resource-management software that allows IT professionals to track the performance of a company's storage infrastructure. Tek-Tools was purchased for $42 million in January 2010 - SWI's second-largest acquisition - improving SWI's storage management services.

From early on, SWI's strategy has been to look for technology that complements its own. Take DameWare, which the company purchased in December 2011 for $40 million, for example. It allowed SWI to better serve IT professionals when it comes to managing computers remotely. Before that, there was TriGeo Network Security Inc. SWI bought the Post Falls, Idaho company for $35 million in July 2011. The buyer based its SolarWinds Log & Event Manager product off of TriGeo's technology, which collects data from devices, allowing users to detect security threats and generate compliance reports.

Hyper9, an Austin-based virtualization management-software developer, was acquired by SWI in January 2011 for $23 million. After the acquisition, SWI used it to create its own software, called SolarWinds Application Performance Monitor.

SWI spent $20 million for WebHelpDesk of Fremont, Calif., in July 2012. The target develops online help-desk software for IT professionals. SWI bought DNSstuff.com, an online troubleshooting service for IT professionals, in October 2011 for $11 million.

In 2012, SWI picked up file transfer company Rhino Software, in December, along with Athena Security, a maker of firewall-management tools acquired in August. Deal terms remain undisclosed.

The buying spree, Thompson reports, has been done entirely with cash on the balance sheet. Indeed, that has allowed the company to remain on the prowl. "We continue to look for opportunities. We're aggressive," he adds.

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