BURLINGTON, Mass. - N-able, Inc. (NYSE: NABL), a provider of IT management solutions, has announced the acquisition of security operations platform Adlumin, Inc. This move aims to enhance N-able's security offerings and drive growth in annual recurring revenue (ARR).
The acquisition, which includes a combination of cash and stock, totals approximately $250 million with potential additional earn-out payments. It is expected to be immediately accretive to N-able's ARR and cash flow positive by the fourth quarter of 2025.
Adlumin's technology will be integrated into N-able's platform to provide a more comprehensive security and IT management solution. This enhanced offering is designed to give managed services providers (MSPs) and internal IT teams a deeper level of insight and remediation capabilities across their IT environments.
John Pagliuca, President and CEO of N-able, expressed enthusiasm for the acquisition, stating that Adlumin's security operations platform aligns with N-able's vision for unified security and endpoint management. Adlumin CEO Robert Johnston also highlighted the value created through the partnership and the potential to scale security practices for IT professionals.
The financial impact of the acquisition has led to an updated financial outlook for N-able. For the fourth quarter of 2024, the company expects total revenue to be between $113.3 to $114.8 million, with adjusted EBITDA of $35.0 to $35.5 million. For the full year, revenue is projected to be in the range of $463.0 to $464.5 million, with adjusted EBITDA between $166.3 to $166.8 million.
DLA Piper LLP (US) and Piper Sandler & Co. served as legal and financial advisors to N-able, respectively, while Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. advised Adlumin.
The acquisition is based on a press release statement and is subject to customary closing conditions, including regulatory approvals. N-able will host a conference call to discuss the details of the acquisition later today.
This report is based on a press release statement and aims to provide a factual overview of the acquisition without endorsement of claims or financial advice.
In other recent news, N-able reported an 8% year-over-year increase in Q3 2024 revenue, reaching $116.4 million, and a 23% rise in adjusted EBITDA to $44.8 million. The company's subscription revenue also experienced growth, with a 9% increase to $115 million. N-able's Cove Data Protection product emerged as the fastest-growing segment, contributing significantly to recurring revenue.
The company anticipates its Q4 revenue to be between $111.5 million and $113 million, while the full-year revenue is expected to range from $461.2 million to $462.7 million. Adjusted EBITDA projections for the year are set between $169.3 million and $169.8 million.
Despite facing economic pressures, N-able expects these challenges to ease by the second half of 2025 and is revising its full-year revenue expectations to reflect a growth of 9% to 10%. Amidst these developments, the company is focusing on extending its product offerings and solidifying its market presence. N-able intends to release two to three new products annually and is investing in research and development to achieve this goal.
InvestingPro Insights
N-able's acquisition of Adlumin aligns with the company's strong financial position and growth trajectory. According to InvestingPro data, N-able boasts impressive gross profit margins of 84.03% for the last twelve months as of Q3 2024, indicating efficient operations and potential for robust cash flow generation. This financial strength supports the company's ability to make strategic acquisitions like Adlumin.
The acquisition is expected to be immediately accretive to N-able's annual recurring revenue (ARR), which is particularly significant given the company's current revenue growth. InvestingPro data shows that N-able's revenue grew by 11.93% over the last twelve months, reaching $458.05 million. This growth trend, combined with the anticipated boost from Adlumin, suggests that N-able is well-positioned to meet or exceed its updated financial outlook.
InvestingPro Tips highlight that N-able's net income is expected to grow this year, which could be further bolstered by the synergies and expanded market opportunities presented by the Adlumin acquisition. Additionally, the company's liquid assets exceed short-term obligations, providing financial flexibility to integrate Adlumin without straining its balance sheet.
It's worth noting that while N-able's stock has faced some recent headwinds, with a 20.44% decline over the past month, the company's fundamentals remain strong. The stock's current trading price may present an opportunity, as it is near its 52-week low and has a P/E ratio of 56.2, which is considered high but may be justified by the company's growth prospects and the potential impact of this strategic acquisition.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for N-able, providing deeper insights into the company's financial health and market position.
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