Ivanti Software, Inc.

The stable outlook reflects our view that Ivanti Software Inc. will continue to maintain its significant base of recurring revenue, while deleveraging to the 7x area while generating positive free cash flow over the next 12 months. We could lower the rating if the company faces bookings and revenue declines that result in negative free cash flow, and we come to view the company's capital structure as unsustainable. We would consider a higher rating if the company generates free cash flow of more than $50 million while sustaining leverage in the low-7x area. Real global GDP growth in the low-3% area in 2020. Real U.S. GDP growth in the high-1% area in 2020. Low-single-digit percent pro forma revenue growth in

...The company operates in a fragmented and competitive market. Ivanti is a comparatively small competitor in its end markets, and its products compete against products from Microsoft Corp., International Business Machines Corp., and Dell Inc., for client management tools and ServiceNow Inc. and BMC Software Inc. in the information technology service support management (ITSSM) business. While the company faced integration challenges following the HEAT Software and LANDesk merger in 2017, new bookings during 2018 were strong. The company has grown through acquisitions, and we expect total revenues of around $490 million in 2019. Customers are in a diverse set of industries. Ivanti is focused in a niche sector of information technology (IT) service management within the larger software and services industry. However, the company's customer base is well diversified with only modest overlap for its maintenance and licensing customers, thus reducing concentration risk. Ivanti serves customers in...

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