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Datto Parent To Buy Apptio For $1.94 Billion

Vista Equity Partners will buy all outstanding Apptio stock for $38.00 per share, a 53 percent premium to the closing price on Nov. 9. The transaction is expected to close in the first quarter of 2019.

Software investment fund Vista Equity Partners—owner of Datto—has agreed to buy Apptio for $1.94 billion. However, Apptio has 30 days to hunt for a better deal, if it can find one.

Vista Equity Partners will buy all the outstanding Apptio stock for $38.00 per share, a 53 percent premium to the closing price on Nov. 9. The so called “go shop” period allows Apptio’s board and advisors to actively “initiate, solicit, encourage, and potentially enter negotiations” with those interested in making an offer.

“Since founding, our focus has been on building the next great cloud software platform by dedicating ourselves to helping companies of all sizes and industries manage, plan, and optimize technology investments across their hybrid IT environments,” said Sunny Gupta, co-founder and CEO of Apptio. “As we look to the next chapter of Apptio, we are thrilled to provide immediate liquidity to our shareholders at a significant premium to market prices and we remain deeply committed to our mission, product innovation, geographical expansion, and the work of the TBM Council. 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 while helping us maintain our commitment to creating wildly successful customers.”

While Apptio’s share price has fallen from a high of $41.23 in September, its revenue has not slowed. During the most recent earnings call Gupta said the company posted 26 percent third-quarter sales growth year over year. He said in that same period Apptio closed one of its largest deals of the quarter. Then on Oct. 3 the company acquired FittedCloud, a provider of machine-learning-based cloud optimization software.

Apptio’s board of directors unanimously approved the agreed sale to Vista and recommended that stockholders vote their shares in favor of the transaction. Apptio’s headquarters will remain in Bellevue, Wash., with regional offices across the U.S., EMEA and APAC. Closing of the deal is subject to customary closing conditions, including the approval of Apptio shareholders and antitrust approval in the U.S. The transaction is expected to close in first-quarter 2019 and is not subject to a financing condition, the company said in a statement.

“Today, with companies across sectors increasingly depending on technology to stay competitive, IT is becoming a critical component for every business on the planet, and Apptio has created the leading platform to help customers manage this new paradigm,” said Brian Sheth, co-founder and president of Vista. “We’re thrilled to partner with Sunny and the entire Apptio team on the next chapter in the company’s growth.”

Qatalyst Partners is serving as the exclusive financial advisor to Apptio and Wilson Sonsini Goodrich & Rosati is serving as legal advisor to Apptio. Vista's legal advisor is Kirkland & Ellis LLP.

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