October 19, 2018 / 3:06 PM / a month ago

SolarWinds shares rise 3.2 pct in downsized market debut

Oct 18 (Reuters) - SolarWinds Corp's shares rose as much as 3.2 percent in their downsized U.S. market debut on Friday, giving the enterprise software maker a market value of about $4.80 billion.

The company's shares opened at $15.41, about 2.7 percent above its initial public offering price of $15.

The Austin, Texas-based company had initially filed to sell 42 million shares and expected the offering to be priced between $17 and $19 apiece.

The company cut the IPO size after stockholders, who were initially selling 25 million shares, chose not to sell any shares. SolarWinds increased its offering size by 8 million shares and cut the target price range to between $15 and $16 per share.

It finally sold 25 million shares at $15 apiece on Thursday, at the low end of its target price range, raising $375 million in total proceeds, which it expects to use to pay down debt. (bit.ly/2P8GGSN)

SolarWinds, whose clients include Accenture, oil giant Chevron, defense contractor Lockheed Martin , provides management software and operates in an industry expected to grow annually at 6.6 percent to around $53.6 billion by 2021, according to International Data Corporation.

The company was taken private in a $4.5 billion deal in 2015 by investment firms Thoma Bravo LLC and Silver Lake Partners, which also holds stakes in Tesla, Alibaba Group , Ant Financial, Dell Technologies and Didi Chuxing. (reut.rs/2yqaKja)

Silver Lake is the company's biggest shareholder with a 44.3 percent stake after the offering. Thoma Bravo - an investor in cyber firm McAfee - holds 36.1 percent.

SolarWinds reported revenue of $398.6 million for the first six months of 2018, up 17 percent from a year earlier. Net loss, however, widened to $86.9 million in the same period, from $45.7 million a year ago.

Its main competitors include International Business Machines Corp, KKR-owned BMC Software, and NetScout Systems, the company said in a filing.

Goldman Sachs & Co, J.P. Morgan, Morgan Stanley, and Credit Suisse were the lead underwriters for the offering. (Reporting by Bharath Manjesh and Aparajita Saxena in Bengaluru; Editing by Arun Koyyur)

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