SolarWinds, a Texas-based IT management software provider, is acquiring Charlotte's SentryOne. The $142 million deal is expected to close this week.
SentryOne's executive team will remain in place, CEO Bob Potter said. It will run SentryOne as an independent unit through this year. Integration and planning will start in 2021, he said. SolarWinds plans to keep all of SentryOne's 130 employees. Nearly 90 of those are based in Charlotte.
"I've always thought we were not reaching enough customers, and our (SentryOne) brand was not tremendously well-known," Potter said. "I see this as an enormous opportunity for us to go everywhere worldwide."
SolarWinds is a well-established global company. It has 30 offices across 19 countries. The company has more than 300,000 total customers. This transaction expands its presence in North Carolina. SolarWinds focuses on IT service management, application performance and managed services.
SolarWinds expects the SentryOne deal to bring $2 million in profits during the fourth quarter, Bart Kalsu, chief financial officer, said in a Tuesday earnings call.
Kalsu said SentryOne fits the description for companies that SolarWinds' IT management business will focus on acquiring in future years. He is expecting revenue in the mid-$20 million range this year, with a growth rate in the low double digits, factoring in the economic slowdown due to the pandemic. Kalsu expects total revenue growth to accelerate in 2021.
Potter said the two companies started talking a few years ago. Executives met at a meeting in Texas in 2019. They reengaged earlier this year to move the deal forward.
SentryOne's focus on database performance management was a selling point, said David Gardiner, president of IT operations management at SolarWinds. SolarWinds entered that space in 2013 when it acquired Colorado-based Confio for $103 million.
Applications, such as Salesforce, are tied to a database. That means app performance is impacted by how well the database operates. It's also where database management comes in.
Gardiner said the intent is to create a focused business within SolarWinds, one that complements its existing product portfolio.
"We really looked at our business and where we thought we wanted to put investment and focus for future growth," Gardiner said. "Database was a market that had the opportunity, we understood that market, and there was the ability to go grow that."
The SentryOne brand will become SolarWinds, although Gardiner sees value in the legacy SQL Sentry and Plan Explorer product names. Elements of those names will continue, he said.
Gardiner also said SolarWinds wants to keep the SentryOne office in South End. The firm redeveloped a 35,000-square-foot warehouse space on Yancey Road in the old Bowers Fiber building. SentryOne debuted the space in early 2019, more than a year after construction began.
SentryOne employees have been working from home during the pandemic.
There are also opportunities for further global expansion, Gardiner said. SolarWinds and SentryOne have operations in Ireland — for example, SentryOne stood up its Europe, Middle East and Asia headquarters in Dublin, Ireland. The new company plans to leverage that presence and expand into other parts of Europe. Gardiner also sees growth opportunities across Asia.
