SolarWinds Worldwide LLC, an enterprise software maker that experienced a high-profile cyberattack in 2020, is reportedly exploring a sale.

Bloomberg reported the development late Thursday, citing people familiar with the matter. SolarWinds is expected to launch the sale process early next year and is believed to have hired financial advisors to help it manage the effort. However, Bloomberg’s sources cautioned that the company could still cancel the plan.

SolarWinds develops software products that help information technology teams carry out their day-to-day work more efficiently. Most its applications are designed to ease the task of monitoring information technology infrastructure for malfunctions, performance drops and other issues. SolarWinds also develops tools for certain related tasks, such as processing technical support requests that workers send to their company’s IT department.

SolarWinds went public in 2009 and was acquired seven years later by two private equity firms, Silver Lake and Thoma Bravo, for $4.5 billion. The company returned to public markets in 2018 at a slightly higher valuation of $4.8 billion. Before the news of its potential sale emerged on Thursday, SolarWinds’ market capitalization stood at about $1.5 billion.

One factor behind the steep decline in the company’s valuation is a high-profile cyberattack that it experienced a few years ago. In 2019, a Russia-linked hacking group gained access to SolarWinds’ network and went unnoticed for over a year. In 2020, the hackers started distributing malicious software updates to customers of SolarWinds’ Orion product, which helps administrators monitor IT infrastructure for technical issues.

More than 18,000 of the 30,000 organizations that used Orion at the time reportedly downloaded the malicious updates. Multiple U.S. government agencies were among the affected customers. The week the breach came to light, SolarWinds’ market capitalization dropped 23%.

Though SolarWinds’ stock price took a hit from the incident, its revenue growth wasn’t entirely interrupted. The company’s top line has been increasing at a steady, albeit slow, pace since the breach. 

SolarWinds generated sales of $256.9 million the quarter after the cyberattack’s discovery, or $173 million not including a business unit that has since spun off. Last quarter, the company’s sales reached $185 million. SolarWinds projects that its top line will grow 3% year-over-year during fiscal 2023 and expects a 11% increase in EBITDA, or earnings before interest, taxes, depreciation and amortization.

Bloomberg’s report didn’t specify the valuation at which SolarWinds is seeking to be acquired. Given that the company’s revenue and profit are both growing, it’s likely to fetch a higher price than the approximately $1.5 billion market capitalization it commanded on Thursday. 

Image: SolarWinds