SolarWinds Announces Confidential Submission of Form 10 Registration Statement for Potential Spin-Off of MSP Business
Summary
AUSTIN, Texas--(BUSINESS WIRE)--SolarWinds Corporation (NYSE:SWI), a leading provider of powerful and affordable IT management software, today announced that it has confidentially submitted with the U.S. Securities and Exchange Commission (SEC) a Form 10 registration statement with respect to the potential spin-off of its managed service provider (MSP) business. As announced on August 6, 2020, the board of directors of SolarWinds previously authorized the exploration of a potential spin-off of its MSP business into a standalone, separately-traded public company. Our products give organizations worldwide, regardless of type, size or IT infrastructure complexity, the power to monitor and manage the performance of their IT environments, whether on-premises, in the cloud, or in hybrid models. It has not been approved by our board of directors, and our statements with respect thereto are preliminary in nature and subject to change as additional information becomes available and as we consider and plan further the future strategic, operational, financial and capital objectives, profiles and structures of the two businesses. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) risks related to the potential spin-off of our MSP business into a standalone, separately traded public company, including that the process of exploring the spin-off and potentially completing the spin-off could disrupt or adversely affect the consolidated or separate businesses, results of operations and financial condition, that the spin-off may not achieve some or all of any anticipated benefits with respect to either business, and that the spin-off may not be completed in accordance with our expected plans or anticipated timelines, or at all; (b) the possibility that the global COVID-19 pandemic may adversely affect our business, results of operations and financial condition; (c) any of the following factors either generally or as a result of the impacts of the global COVID-19 pandemic on the global economy or on our business operations and financial condition or on the business operations and financial conditions of our customers, their end-customers and our prospective customers: (i) reductions in information technology spending or delays in purchasing decisions by our customers, their end-customers and our prospective customers, (ii) the inability to sell products to new customers or to sell additional products or upgrades to our existing customers, (iii) any decline in our renewal or net retention rates, (iv) the inability to generate significant volumes of high quality sales leads from our digital marketing initiatives and convert such leads into new business at acceptable conversion rates, (v) the timing and adoption of new products, product upgrades or pricing model changes by SolarWinds or its competitors, (vi) potential foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity, (vii) risks associated with our international operations; (d) the possibility that our operating income could fluctuate and may decline as percentage of revenue as we make further expenditures to expand our operations in order to support additional growth in our business; (e) our inability to successfully identify, complete, and integrate acquisitions and manage our growth effectively; (f) our status as a controlled company; and (g) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors discussed in our Annual Report on Form 10-K for the period ended December 31, 2019 filed on February 24, 2020, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed on May 8, 2020 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed on August 10, 2020.
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