Thoma Bravo Is Said to Mull IPO, Sale of Software Firm Dynatrace

(Bloomberg) -- Thoma Bravo, a technology focused private equity firm, is exploring a sale or initial public offering of software designer Dynatrace LLC, which could value the company at as much as $4 billion, according to people familiar with the matter.

Thoma Bravo is talking to advisers about pursuing options for Waltham, Massachusetts-based Dynatrace as soon as the second half of this year, said the people, who asked to not be identified because the matter is private. No decision has been made and Thoma Bravo could opt to hold onto Dynatrace, they said.

Private equity firms often evaluate a sale and public offering at the same time for companies to ensure the best return on investment.

Dynatrace is most likely to go public because there are few buyers for such a large company, one of the people said.

Markets have been receptive to software IPOs this year. Six such U.S. listings have raised about $3 billion, according to data compiled by Bloomberg. DocuSign Inc. and Dropbox Inc. have each gained more than 50 percent since joining the public markets.

Representatives for Thoma Bravo and Dynatrace declined to comment.

Thoma Bravo acquired Dynatrace through its $2.4 billion buyout of Compuware Corp. in 2014. It carved out Compuware’s application performance management division and renamed it Dynatrace. The company offers products and services that help companies monitor their software applications.

Dynatrace competes with AppDynamics Inc., the software company that was sold to Cisco Systems Inc. for $3.7 billion less than 24 hours before it’s IPO was to price.

AppDynamics had targeted a maximum valuation of $1.7 billion in its IPO. Cisco paid about a 20 percent premium to what investors had anticipated AppDynamics to trade at in its early days on the market, a person familiar with the matter said at the time.

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