Rival bid for SolarWinds ‘unlikely,’ says Morgan Stanley

Morgan Stanley analyst Sanjit Singh reiterated an Equal Weight rating and $14 price target on SolarWinds (SWI) after it agreed to be acquired by Turn/River Capital in an all-cash transaction valued at around $4.4B. The firm said that, given the fair valuation, mid-single digit growth profile, and a number of alternatives in a highly fragmented IT operations market, it believes another offer for SolarWinds, either from a strategic or financial buyer, is unlikely. Additionally, the firm noted that fundamentals point to continued deceleration for SolarWinds, though recent execution has improved.