A battered stock, a beneficial buyout, and the identity software industry gets a makeover

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Elias Stein


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Enterprise software stocks have been under siege lately. But depressed valuations are attracting bargain-minded private equity buyers. Wednesday,

Ping identity
,

which sells identity security software, announced a deal to be acquired by Thoma Bravo for $28.50 per share, or $2.8 billion. Ping went public at $15 a share in September 2019 and sold for a staggering 63% premium to Tuesday’s closing price.

Thoma Bravo has been a busy buyer. In June, the company bought Anaplan for $10.4 billion in cash; in May, it paid $2.6 billion for payments technology company Bottomline Technologies; and in April he agreed to buy

SailPoint Technologies
,

which also sells identity software, for $6.9 billion. BTIG Holdings analyst Gray Powell notes that Thoma Bravo is paying about 6.5 times projected 2023 sales.

Okta
,

a Ping rival, trades 6.8 times, while

ForgeRock
,

another pair, for 5.8. The SailPoint deal, Powell adds, was priced at just over 10 times 2023 sales.

Powell says Ping’s term-licensing business model “has consistently created earnings confusion and carries a higher degree of title risk,” leading him to believe that no other bidders will emerge. Raymond James analyst Adam Tindle sees synergies between Ping’s pending SailPoint deal and Thoma Bravo.

The Ping deal had side effects: Okta, a struggling pandemic darling, rose 7.8% to $105.52, while ForgeRock, which went public in 2021 at $25 per share, surged 8.8% to $23.65. On Friday, Ping shares were trading just below the trade price at $27.92. Okta is still down 53% for the year and ForgeRock is down 11%.

Write to Eric J. Savitz at [email protected]

Last week

Your base draw

Stocks faltered on tensions in Taiwan, fell after Federal Reserve officials reiterated hawkish sentiments, then rose on earnings. New unemployment claims came in at 260,000, as expected; new jobs soared to 528,000. On weekdays, the


Dow Jones Industrial Average

was down 0.13% at 32,803.47; the


S&P500

edged up 0.36% to 4145.19; and the


Nasdaq Compound

rose 2.15% to 12,657.55.

The pace of gains

At the start of a busy results week,

Goldman Sachs

said 52% of companies beat, above expectations but below the past five quarters.

Devon Energy

led the shale energy crowd with skyrocketing profits and revenues. Big Oil

BP

posted its best profits in 14 years.

KKR

took a loss, blaming market volatility.

Robinhood Markets

lost $295 million and reduced its workforce by 23%, and

Airbnb

lack.

Starbucks

and

SVC Health

to beat,

UberTechnologies

announced its first positive quarterly cash flow, and

Modern

and

PayPal

beat and stocks rallied.

Pelosi in Taiwan

House Speaker Nancy Pelosi and a delegation of lawmakers traveled to Taiwan, despite growing tensions over the trip between the United States and China. After Pelosi left Taipei, China began live-fire exercises off the coast, boycotted some Taiwanese products and halted military and climate talks. Separately, a US drone strike killed al-Qaida leader Ayman al-Zawahiri, 71, on a balcony in Kabul, Afghanistan.

Senate in action

The Senate passed a bill it had rejected a week earlier providing funds for Afghan veterans exposed to the burning stoves. Democrats dropped a curb on interest in the tax and climate bill to win the support of Arizona Sen. Kyrsten Sinema. And Kansas voters defeated a referendum to ban abortion in the state.

Take out the grain

A ship carrying 26,000 tons of corn has left Odessa for Lebanon, the first of a deal with Russia on grain shipments. Ukraine continued its counteroffensive against Kherson as Russia continued to prepare to annex the region. A Russian court sentenced WNBA star Brittney Griner to nine years for drug trafficking.

Annals of Deal Making

The Justice Department tried to block two deals in separate trials in the same Washington, D.C. courthouse: Bertelesmann’s $2.2 billion Penguin Random House merger and

World Paramount
it is

Simon & Schuster, and

UnitedHealth Group
it is

$8 billion contract for

Changing healthcare

…Global Payments said it would acquire

EVO Payments

for an enterprise value of $4 billion…

Toronto-Dominion Bank

agreed to acquire an investment bank

cowen

for $1 billion… The Wall Street Journal reports that the cosmetics giant

Estee Lauder

was in talks to buy the luxury brand Tom Ford… A

Global Apollo Management

-the led group agreed to buy air cargo company Atlas Air Worldwide for $3.2 billion…Thoma Bravo said he was taking

Ping identity

private for $2.8

billion… Amazon.com

said he was vacuuming

i robot

for $1.65 billion.

Write to Robert Teitelman at [email protected]

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