Thoma Bravo's Behind the Deal cover image

Thoma Bravo's Behind the Deal

How a Complex Carveout Led to Dynatrace Disrupting Itself and Then an Entire Industry

Jan 18, 2024
Thoma Bravo Partner Chip Virnig goes behind the deal with Dynatrace, discussing the complexities of the transaction and the areas of value creation. Former Dynatrace CEO John Van Siclen joins to share his perspective on the growth in enterprise software. The deal became a fascinating case study, borrowing strategies from the Thoma Bravo playbook and deploying them all on the same deal. The podcast explores the acquisition and complex carveout of Dynatrace, the benefits and challenges of carving out a business, the importance of disruption in the technology industry, and Dynatrace's remarkable growth from a venture-backed company to a publicly traded firm.
43:35

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Quick takeaways

  • The Dynatrace deal showcased the power of disruptive innovation and successful carve-out strategies in the technology industry.
  • Toma Bravo's partnership with Dynatrace and commitment to backing existing management drove the successful transition to a cloud-based platform and multi-billion dollar growth.

Deep dives

The Intricate Deal: Dynatrace Acquisition by Toma Bravo

The podcast episode discusses the complex Dynatrace deal, which involved a carve out, take private, subsequent IPO, and the sale of a million-square-foot building. Toma Bravo partner Chip Burning was unwavering in his belief in the value of Dynatrace, a leading provider of modern cloud infrastructure and application observability solutions. Despite initial challenges and declining revenue streams, Toma Bravo and the Dynatrace team successfully navigated the transition to a cloud-based platform. They disrupted themselves, carved out the mainframe business, and merged the APM unit with an existing portfolio company. The successful IPO and growth of Dynatrace showcases Toma Bravo's investment judgment, the symbiotic relationship between high margins and high growth, and the implementation of various operating levers.

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