Categories
TECH TECHNOLOGIES technology

Vista snaps up Apptio for $1.94B, as enterprise companies remain hot

Vista snaps up Apptio for $1.94B, as enterprise companies remain hot

It seems that Sunday has become a popular day to announce large deals involving enterprise companies. IBM announced the $34 billion Red Hat deal two weeks ago. SAP announced its intent to buy Qualtrics for $8 billion last night, and Vista Equity Partners got into the act too, announcing a deal to buy Apptiofor $1.94 billion, representing a 53 percent premium for stockholders.
Vista paid $38 per share for Apptio,  a Seattle company that helps companies manage and understand their cloud spending inside a hybrid IT environment that has assets on-prem and in the cloud. The company was founded in 2007 right as the cloud was beginning to take off, and grew as the cloud did. It recognized that companies would have trouble understanding their cloud assets along side on-prem ones. It turned out to be a company in the right place at the right time with the right idea.
Investors like Andreessen Horowitz, Greylock and Madrona certainly liked the concept, showering the company with $261 million before it went public in 2016. The stock price has been up and down since, peaking in August at $41.23 a share before dropping down to $24.85 on Friday. The $38 a share Vista paid comes close to the high water mark for the stock.
Stock Chart: Google
Sunny Gupta, co-founder and CEO at Apptio liked the idea of giving his shareholders a good return while providing a good landing spot to take his company private. Vista has a reputation for continuing to invest in the companies it acquires and that prospect clearly excited him. “Vista’s investment and deep expertise in growing world-class SaaS businesses and the flexibility we will have as a private company will help us accelerate our growth…,” Gupta said in a statement.
The deal was approved by Apptio’s board of directors, which will recommend shareholders accept it. With such a high premium, it’s hard to imagine them turning it down. If it passes all of the regulatory hurdles, the acquisition is expected to close in Q1 2019.
It’s worth noting that the company has a 30-day “go shop” provision, which would allow it to look for a better price. Given how hot the enterprise market is right now and how popular hybrid cloud tools are, it is possible it could find another buyer, but it could be hard to find one willing to pay such a high premium.
Vista clearly likes to buy enterprise tech companies having snagged Ping Identityfor $600 million and Marketo for $1.8 billion in 2016. It grabbed Jamf, an Apple enterprise device management company and Datto, a disaster recovery company last year. It turned Marketo around for $4.75 billion in a deal with Adobe just two months ago.
Categories
TECH technology

WeWork picks up another $ 3B of SoftBank


WeWork picks up another $ 3B of SoftBank


Adam Newman (WeWork) at TechCrunch Disrupt NY 2017
WeWork received an additional US $ 3 billion in financing from SoftBank, not confused with SoftBank Vision. The transaction comes in the form of a note, allowing SoftBank to pay $ 3 billion to allow shares to be bought before September 2019 at $ 110 or more, ultimately leading to WeWork’s $ 42 billion valuation.


In August, Softbank invested $ 1 billion in WeWork as a convertible note.

According to the Financial Times, SoftBank will pay WeWork $ 1.5 billion on January 15, 2019 and another $ 1.5 billion on April 15.

SoftBank is the largest investor in WeWork, with SoftBank Vision contributing $ 4.4 billion to the company last year.

Playing real estate in WeWork is just one aspect of the company’s strategy.

More than physical ground, WeWork wants to be the central connective tissue to work in general. The company often contracts with top service providers at “full sale” prices by negotiating on behalf of its 300,000 members. In addition, WeWork has developed corporate products for large companies, such as Microsoft, who tend to sign longer and more lucrative lease contracts. In fact, these types of deals make up 29 per cent of WeWork revenues.

The biggest issue is whether WeWork can maintain its overheated growth, which seems to have been the key to its high valuation. After all, WeWork has yet to achieve profitability.

Can vision become a reality? SoftBank seems willing to bet on it.
WeWork picks up another $ 3B of SoftBank