Turn/River Capital to take SolarWinds private in $4.4 billion deal

Adds analyst comment in penultimate paragraph; updates share movement

Feb 7 (Reuters) - SolarWinds SWI.N said on Friday it would go private in a $4.4 billion deal with buyout firm Turn/River Capital, the latest sign debt-funded deals were set to rebound this year as borrowing costs decline.

Shares of the IT management software firm were up 23%. The stock has fallen 35% in the past twelve months, as of last close.

Private equity firms are increasingly bidding for software companies with a strong enterprise customer base that brings in recurring sales. Buyout activity is also expected to pick up this year as cheaper financing allows for more acquisitions.

"We believe that SolarWinds' healthy free cash flow margins made the company attractive to financial buyers," analysts at Truist Securities said.

Under the deal, Turn/River Capital will pay the company's shareholders $18.50 per share in cash, representing a premium of about 23.1% to its last closing price. The deal is expected to close in the second quarter.

Thoma Bravo and Silver Lake — which collectively hold approximately 65% of the outstanding voting securities of SolarWinds — have approved the transaction.

The go-private transaction has an equity value of $3.16 billion, according to Reuters calculations.

SolarWinds' software continuously monitors network performance and is designed to detect and resolve issues such as unexpected spike in network traffic that could lead to slower performance or outages.