ForgeRock deal unlikely to be derailed by competition concerns - analyst (update)
Maksim Labkouski

Update 12:53pm: Adds details from proxy filing.
ForgeRock's (NYSE:FORG) planned sale to Thoma Bravo is likely to close in the 1H of next year even as investors appear concerned about potential competition concerns, according to Morgan Stanley. 
Thoma Bravo's recent acquisitions in the Identify and Access Management market, including SailPoint, Ping Identity and the planned purchase of ForgeRock, aren't expected to drive "material" changes in competitive or pricing dynamics in the IAM market, Morgan Stanley analyst Hamza Fodderwala, who has an equal-weight rating and $17 price target on FORG, wrote in a note on Monday.
The note comes after a Tuesday report that Thoma Bravo plans to pull and refile its ForgeRock (FORG) merger notice with U.S. antitrust regulators. The companies are set to pull and refile to give the deal to give the Dept. of Justice more time to review the combination. The spread in the deal has widened amid investor concern the company's $2.3 billion sale to Thoma Bravo may see an in-depth U.S. antitrust review due to concentration in the identity management sector.
ForgeRock (FORG) and Thoma Bravo confirmed in a proxy filing Monday that it withdrew its antitrust filing as of Nov. 23 and plans to refile it on or about today to allow the DOJ additional time to review it. 
In total, the combined market share of ForgeRock (FORG), SailPoint and Ping Identity will be <10% in the IAM market, according to Fodderwala. The MS analyst also highlighted that Microsoft (MSFT) and Okta (OKTA) have become more competitive in the large enterprise segment and the market is increasingly shift to SaaS.
"We don't expect Thoma Bravo's recent acquisitions in the IAM market to drive material changes in competitive or pricing dynamics, given a crowded market and growing traction from MSFT likely limits pricing," Fodderwala wrote.
If a deal with Thoma Bravo isn't consummated, Fodderwalla sees potential downside in ForgeRock (FORG) to $13 or $14/share, representing as much as 40% decline from FORG's current share price.
Matt Stoller, Director of Research at the American Economic Liberties Project, argued in a post last week that the transaction would reduce the number of players in the space to three from two. 
The Thoma Bravo deal for ForgeRock (FORG) comes after the private equity firm agreed to buy Ping Identity for $2.8 billion in August and SailPoint Technologies for $6.9 billion in April.