ForgeRock deal unlikely to be derailed by competitors considerations – analyst (NYSE:FORG)

ForgeRock’s (NYSE:FORG) deliberate sale to Thoma Bravo is more likely to shut within the 1H of subsequent yr whilst buyers seem involved about potential competitors considerations, in accordance with Morgan Stanley.

Thoma Bravo’s latest acquisitions within the Establish and Entry Administration market, together with SailPoint, Ping Id and the deliberate buy of ForgeRock, aren’t anticipated to drive “materials” adjustments in aggressive or pricing dynamics within the IAM market, Morgan Stanley analyst Hamza Fodderwala, who has an equal-weight ranking and $17 worth goal on FORG, wrote in a be aware on Monday.

The be aware comes after a Tuesday report that Thoma Bravo plans to tug and refile its ForgeRock (FORG) merger discover with U.S. antitrust regulators. The businesses are set to tug and refile to offer the deal to offer the Dept. of Justice extra time to evaluation the mixture. The unfold within the deal has widened amid investor concern the corporate’s $2.3 billion sale to Thoma Bravo may even see an in-depth U.S. antitrust evaluation as a consequence of focus within the id administration sector.

In whole, the mixed market share of ForgeRock (FORG), SailPoint and Ping Id can be <10% within the IAM market, in accordance with Fodderwala. The MS analyst additionally highlighted that Microsoft (MSFT) and Okta (OKTA) have turn into extra aggressive within the giant enterprise phase and the market is more and more shift to SaaS.

“We do not count on Thoma Bravo’s latest acquisitions within the IAM market to drive materials adjustments in aggressive or pricing dynamics, given a crowded market and rising traction from MSFT seemingly limits pricing,” Fodderwala wrote.

If a cope with Thoma Bravo is not consummated, Fodderwalla sees potential draw back in ForgeRock (FORG) to $13 or $14/share, representing as a lot as 40% decline from FORG’s present share worth.

Matt Stoller, Director of Analysis on the American Financial Liberties Undertaking, argued in a submit final week that the transaction would scale back the variety of gamers within the area to a few from two.

The Thoma Bravo deal for ForgeRock (FORG) comes after the non-public fairness agency agreed to purchase Ping Id for $2.8 billion in August and SailPoint Applied sciences for $6.9 billion in April.