Menu
Informatica goes private in $US5.3bn buyout

Informatica goes private in $US5.3bn buyout

The move will take the data-integration giant away from Wall Street's prying eyes

Back in 2010 there was a round of widespread speculation that Oracle was about to snap up Informatica, but - like so many such rumours - it never came to pass. Now, Informatica is getting purchased by someone else.

On Tuesday, the data-integration giant announced that it has accepted a $US5.3 billion offer to be acquired by European private-equity firm Permira and the Canada Pension Plan Investment Board. Informatica shareholders will receive $48.75 in cash for each share of Informatica common stock.

The deal is said to be the largest leveraged buyout so far in the US this year.

"Informatica is a clear leader in the essential field of enterprise data solutions," said Permira Partner Brian Ruder. "We are very excited about the company's ongoing transition to cloud and subscription-based services, as well as its continued pursuit of four separate billion-dollar market opportunities in cloud integration, master data management, data integration for next-generation analytics, and data security."

Informatica's board of directors has unanimously approved the merger agreement and will recommend that Informatica shareholders adopt it as well. The transaction is expected to be completed in either the second or third quarter of 2015.

"Normally, when a public company like Informatica goes private, it's because they need to invest in some foundational technology or other organizational change that they don't want to have to explain or justify to Wall Street," said Carl Olofson, a research vice president with IDC.

Informatica sees Cloud integration as a key opportunity and has already been investing in it, Olofson added. It's also looking to evolve its technology to serve the rapidly changing big-data space of Hadoop and NoSQL databases.

"I suspect that they want to retool to take better advantage of these opportunities without the prying eyes of the public examining them, and without needing to worry about the vicissitudes of share-price shifts," Olofson said.

In a way, the sale of Informatica qualifies as the latest in a series of technology "dominoes" falling into private ownership, said Charles King, principal analyst with Pund-IT.

"Like Dell and Tibco before it, Informatica is a steadily profitable company whose share value has failed to reflect its overall success," King said. "That, in turn, has led its management and investors to consider other options, including entertaining acquisition offers."

The $US48.75-per-share offer is a significant premium over the recent price of Informatica stock, making the deal a "slam-dunk" for the company's board of directors, King said.

"So long as the new owners can retain experienced management and Informatica's substantial customer base, the agreement should play out well for everyone involved," he predicted. "If that proves to be the case, I expect to see additional technology companies heading toward private ownership."

The deal is a good offer, said Ray Wang, founder and principal analyst with Constellation Research.

But he does have one reservation: "When you are owned by a European private-equity firm and competing with west coast VCs, the company is at a disadvantage," he said.

In particular, European private-equity firms "like to use drip financing, often don't allow companies to grow as fast as their potential and force profits over long-term expansion," Wang said.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags business issuesapplicationsinformaticasoftwareData managementMergers and acquisitions

Slideshows

Top 50 defining moments of the New Zealand channel in 2016

Top 50 defining moments of the New Zealand channel in 2016

Reseller News looks back on a tumultuous 12 months for the New Zealand channel, assessing the fallout from a year of sizeable industry change. Whether it be local or global mergers and acquisitions, distribution deals or job changes, the channel that started the year differs somewhat to the one set to finish it - Reseller News assesses the key moments that made 2016.​

Top 50 defining moments of the New Zealand channel in 2016
​Hewlett Packard Enterprise honours high achieving NZ channel

​Hewlett Packard Enterprise honours high achieving NZ channel

Hewlett Packard Enterprise honoured its top performing Kiwi partners at the second running of its HPE Partner Awards in New Zealand, held at a glitzy ceremony in Auckland. Recognising excellence across eight categories - from distributors to resellers - the tech giant celebrated its first year as a standalone company, following its official split from HP in 2015.

​Hewlett Packard Enterprise honours high achieving NZ channel
Nutanix treats channel partners to Christmas cruise

Nutanix treats channel partners to Christmas cruise

Nutanix recently took to the seas for a Christmas Cruise around Sydney Harbour with its Australia and New Zealand staff, customers and partners to celebrate a stellar year for the vendor. With the sun out, they were all smiles and mingled over drinks and food.

Nutanix treats channel partners to Christmas cruise
Show Comments