Public Venture

M&A’s $10 Billion Weekend

What a weekend for mergers and acquisitions.  A public company and an almost public company have found new homes.

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First, Apptio, a Seattle-based SaaS company that sells business management software for cloud companies, was swept up this weekend in a $1.95 billion deal with Vista Equity Partners. The company, which was founded in 2007, and raised a known total of $261 million during its private life. The company went public in September 2016 and was valued at $872 million at the time, pricing its shares at $23.40.

Austin-based Vista Equity Partners acquired the company for $38.00 per share, which represents a 53 percent premium for shareholders, according to Apptio. For Vista, this represents the seventh acquisition the group has made just this year. The firm, which focuses on software businesses, most recently acquired Israel-based Starhome Mach in October. But Apptio wasn’t the only company that changed its mind about public life.

In exciting news for the company, but less exciting news for us, Qualtrics was acquired. We’ve been following the Qualtrics IPO since the company filed in October. The SaaS company was unique for IPOs this year, pulling a minor profit with healthy growth. Last week, Qualtrics set its range $18 – $21 per share, and its ducks were in a row for a public debut.

Over the weekend, however, it was announced that the company will now forgo public life in favor of a new home in enterprise software company SAP. The German company revealed the $8 billion acquisition deal on Sunday. According to Crunchbase, this is the 38th acquisition for SAP overall and its fourth just this year. The company also acquired CallidusCloud for $2.4 billion in January. According to Bloomberg, the Qualtrics deal is the priciest acquisition SAP has made.

Qualtrics had raised a known total of $400 million, according to Crunchbase, from investors including Accel, Sequoia Capital, and Insight Venture Partners. Taking a look at our own work on Qualtric’s valuation when it priced, at the top of its range, we estimated that the company would have been worth $4.5 billion.

While going public can represent an important milestone in the life of a growing company, sometimes execs have to opt for a better deal. While we were excited for Qualtrics to debut, we’ll just have to wait for the next profitable company to file. It may be a while.

Illustration Credit: Li Anne Dias