TPG Capital To Buy Thycotic For $1.4B, Merge It With Rival Centrify: Report

The deal between TPG and privileged access management vendor Thycotic was signed Monday but has yet to close. It will lead to the private equity firm combining Thycotic with recently acquired rival Centrify.


TPG Capital has agreed to purchase privileged access management (PAM) vendor Thycotic for $1.4 billion and combine it with recently acquired competitor Centrify, PE Hub reported.

The deal between San Francisco-based TPG and Washington, D.C.-based Thycotic was signed Monday but has yet to close, sources told PE Hub. Thycotic’s $1.4 billion valuation translates into an 11.6X revenue multiple, according to PE Hub, which reported last month that Thycotic generates $120 million in sales and is nearly even on earnings before interest, taxation, depreciation and amortization (EBITDA).

Insight Partners has been Thycotic’s majority owner since July 2015, and PE Hub reported last month that the private equity firm had brought in investment banking advisory firm Evercore to assist in the process of selling Thycotic. Evercore declined to comment, while Thycotic, Centrify, TPG and Insight Partners didn’t immediately respond to CRN requests for comment.

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[Related: Insight Partners Aims To Sell Privileged Access Firm Thycotic: Report]

TPG said in late January that it would be acquiring Santa Clara, Calif.-based PAM vendor Centrify from Thoma Bravo for an undisclosed amount. The private equity firm also named former Symantec Enterprise Head and Skyport Systems CEO Art Gilliland as Centrify’s next CEO, replacing Flint Brenton, who has only held the top job at Centrify since July 2020.

Meanwhile, Thycotic has been led since July 2015 by James Legg, the former president and CEO of PHD Virtual Technologies. Under Legg’s direction, Thycotic has been the fastest-growing company in the PAM market, growing at 40 percent year over year, one source told PE Hub. The PE Hub report didn’t indicate who would lead the combined Centrify-Thycotic operation going forward.

Thycotic was founded in 1996 and employs 519 people, according to LinkedIn. The company has increased its head count by 13 percent over the past year and 51 percent over the past two years, with the most significant hiring taking place in Thycotic’s sales, information technology and engineering departments, LinkedIn reported.

The company increased its global channel sales by 28 percent and partner deal registrations by 17 percent in 2020 thanks to new educational initiatives, enhanced customer service and marketing support for partners, Thycotic said last month. Roughly five-sixths—or $100 million—of Thycotic’s annual revenue is recurring, PE Hub reported.

Centrify has been through a lot of transitions as of late and will get its third owner and fourth top executive in less than three years when the TPG acquisition closes. The company was acquired in July 2018 by Thoma Bravo from a consortium of venture capital firms, and three months later announced plans to spin its Identity-as-a-Service business into a stand-alone company called Idaptive.

Then in May 2020, Thoma Bravo sold single sign-on, multifactor authentication and identity life-cycle management services vendor Idaptive to Centrify rival CyberArk for $70 million. Meanwhile, Centrify in October 2018 named Tim Steinkopf as its next CEO, replacing Tom Kemp, who co-founded the company in 2004 and grew it to nearly 500 employees during his almost 15 years as CEO.

Eight months ago, Brenton took over as Centrify’s CEO after Steinkopf retired for health reasons. Centrify today employs 292 people, down 11 percent from a year earlier, according to LinkedIn.