IT management software firm SolarWinds has signed an agreement to acquire SentryOne, a provider of database performance monitoring and DataOps solutions on SQL Server, Azure SQL Database, and the Microsoft Data Platform. In reaction to the news, SolarWinds shares surged 4.7% in the extended trading session on October 23.
SolarWinds (SWI) believes that SentryOne’s products will complement its on-premise and cloud-native database management offerings. The company also expects the addition of SentryOne to enhance the depth and breadth of support it can offer for Microsoft and Microsoft Azure environments.
The company did not disclose the financial terms of the deal. Meanwhile, it expects the transaction to be completed later this month. (See SWI stock analysis on TipRanks)
Commenting on the acquisition, SolarWinds’ CEO Kevin B. Thompson said, “We believe the explosion of business-critical applications, and their reliance on peak database performance, presents an opportunity for SolarWinds to continue to expand our support for IT organizations.”
“We care about the database because we care about applications. Database performance is most often where the app goes wrong—whether on-premises or in the cloud. And, because databases are so critical to application performance, IT pros and business leaders from the dedicated database administrator to the ‘accidental DBA,’ from application developers and APM pros fueling their apps with data, to BI pros and business leaders who need insights to power their organizations—all rely on database performance to drive success,” Thompson added.
On October 7, Berenberg analyst Kingsley Crane initiated coverage of SolarWinds with a Buy rating and a price target of $26. The analyst initiated coverage of five companies within the Observability space, stating that the rapid pace of modern IT operations has triggered a paradigm shift from “Monitoring,” or inspection of a system based on predefined metrics, to “Observability,” which is the active exploration of emerging, undefined patterns.
Overall, the Street has a Moderate Buy consensus rating for SolarWinds that breaks down into 4 Buys, 2 Holds and 1 Sell. With shares rising about 17% so far in 2020, the average analyst price target of $21.86 indicates that the shares are fully priced at current levels.
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