TheChek News Flow

Bankers expect flurry of listings on back of buoyant stock markets and easing financial conditions

Cybersecurity specialist SailPoint’s initial public offering is poised to hand investors a multibillion-dollar windfall from a private equity deal struck at the height of a record wave of takeovers in 2021 and 2022.

US private equity group Thoma Bravo stands to make more than $4bn from the IPO, which is expected to value the Texas-based company at more than $12bn.

The sum would represent a large paper gain from a takeover many private equity investors had worried was struck at a sky-high valuation that would be weighed down by falling tech valuations.

Thoma Bravo paid $6.9bn for SailPoint in April 2022, about 15 times annual sales for a company that was barely profitable at the time.

Fears about the deal’s lofty valuation were accentuated by surging inflation in 2022 that forced the Federal Reserve to raise interest rates to more than 5 per cent.

The markedly different environment wreaked havoc on the private equity industry, which has returned minimal amounts of cash to its investors in recent years as markets for new listings have seized up and merger activity has slowed.

Many analysts expected private equity groups such as Thoma Bravo, which manages $160bn in assets and was among the most active dealmakers in 2021, would be forced to hold their investments for longer to justify their purchase price. SailPoint’s annualised recurring revenues have roughly doubled to more than $800mn since Thoma Bravo’s buyout, according to filings.

Thoma Bravo used about $6bn of its investors’ cash to buy SailPoint. In December 2024, it invested a further $600mn to pay down SailPoint’s debt in an effort to increase the company’s appeal to shareholders. The deal raised Thoma Bravo’s overall equity investment to $6.6bn.

SailPoint stock is being offered to investors at $23 a share, according to Bloomberg, up from a range of $19 to $21. At SailPoint’s new price range, Thoma Bravo’s gains stand to be more than $4bn.

However, since it is not selling stock as part of the offering, the windfall has not been realised and will be exposed to SailPoint’s performance on public markets.

SailPoint will use proceeds of more than $1bn to repay virtually all of its outstanding debt. The IPO has attracted anchor investors Dragoneer Investment Group and AllianceBernstein, which will purchase about 20 per cent of the offering. 

Buoyant stock markets and easing financial conditions mean bankers expect a flurry of listings in the coming months, driven in part by private equity groups looking to offload some of their biggest holdings acquired when interest rates were close to zero.

But the year has begun slowly for dealmaking and IPOs. Shares in US liquid natural gas exporter Venture Global, for instance, are down almost 40 per cent since the company’s debut in mid-January.

SailPoint’s IPO is being closely watched as a useful gauge of investor appetite for tech listings after DeepSeek’s cut-price artificial intelligence breakthrough stunned markets last month.

“Everyone was expecting the market to be fabulous under a Republican administration, but it hasn’t gone to plan so far,” said a person close to the IPO for space and defence contractor Karman Holdings, which is also expected to start trading this week.

Karman has set a valuation range of $18 to $20 a share for a $400mn IPO, implying a fully diluted market capitalisation of $2.5bn.

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UK Supreme Court on Wednesday quashed extradition of Joseph El-Khouri, curbing the reach of US prosecutors

The UK Supreme Court has quashed the extradition to the US of a trader accused of insider trading in an unusual decision by British judges to curb the reach of American justice.

The UK’s highest court on Wednesday ruled in favour of Joseph El-Khouri, who US prosecutors claimed netted $2mn in profits from an insider trading conspiracy.

El-Khouri, a dual British and Lebanese national who lives in the UK, was charged in New York in 2019 and accused of obtaining inside information about prospective mergers and acquisitions of New York-listed companies.

The Manhattan US attorney’s office claimed he paid an intermediary for the information in cash and gifts including a yacht in Greece, a chalet in France and a hotel room in New York, and traded “contracts for difference” through a UK broker.

El-Khouri resisted extradition and accused the American authorities of over-reach, arguing that any links to the US were tenuous as the alleged misconduct took place in London.

A lower court had previously allowed his extradition after a hearing in 2021 and the UK government ordered that El-Khouri be sent to the US. An initial appeal by the trader at the High Court in London failed.

But a panel of five senior judges, led by the Supreme Court president Lord Robert Reed, on Wednesday unanimously ruled in his favour, blocking his removal on the grounds that the alleged criminality occurred outside the US.

The court noted that the UK’s Financial Conduct Authority conducted an investigation into El-Khouri between November 2016 and January 2018 but had concluded there was insufficient evidence to prosecute him.

El-Khouri’s lawyer, Richard Cannon of Stokoe Partnership Solicitors, said the ruling “brings to an end a five-and-a-half-year nightmare” that began with his arrest in 2019.

He added that the decision “represents an important check on over-reach” by the US authorities.

The US state department in London did not immediately respond to a request for comment.