Vista Equity hires banks for Ping Identity IPO: sources

(Reuters) - Buyout firm Vista Equity Partners has hired investment banks to prepare its identity software maker Ping Identity for an initial public offering that could value it at between $2 billion and $3 billion, including debt, people familiar with the matter said.

While the appointment of IPO underwriters typically signifies a stock market debut in the coming months, Ping Identity may not launch its IPO until late 2019 or even 2020, because it wants to build on its financial performance, the sources said on Tuesday.

Vista Equity will also consider any acquisition offers it receives for Ping Identity, even as it is focused on preparing to become a publicly traded company, the sources added.

Goldman Sachs Group Inc GS.N will lead Ping Identity's IPO syndicate, the sources said.

The sources asked not to be identified because the matter is confidential. Vista Equity and Goldman Sachs declined to comment. Ping Identity could not immediately be reached for comment.

Ping Identity would join a host of companies aiming to go public in 2019, which is shaping up to be a banner year for technology listings. Ride-sharing rivals Uber and Lyft are racing to get to the public markets first and could raise billions from investors, while high-profile enterprise software companies such as Slack and Zoom Networks have also been preparing to go public next year, Reuters has reported.

A successful deal could generate a tidy profit for Vista Equity after it bought Denver-based Ping Identity for $600 million in 2016.

An IPO would be a rare example of Vista Equity cashing out on an investment through a stock market flotation, as it tends to sell its portfolio companies outright, to large public companies or other private equity firms.

Vista Equity sold marketing software firm Marketo to Adobe Inc ADBE.O for $4.75 billion earlier this year, just two years after it took it private for $1.8 billion.

Ping Identity, founded in 2002, competes against the likes of Microsoft Corp MSFT.O in user identity management, which helps verify which employees can access what technology at a company. These services are becoming more important as corporate employees need to securely connect to many applications in the cloud to get their work done.

Another company in the sector, Okta Inc OKTA.O, went public last year and is now trading at 275 percent above its IPO price, at a market capitalization of about $7 billion.

Earlier this year, in a $2.35 billion deal, Cisco Inc CSCO.O bought privately held Duo Security, another company that helps verify user identities with a two-step authentication process.