INSUBCONTINENT EXCLUSIVE:
Workday, the cloud-based platform that offers HR and other back-office apps for businesses, is making an acquisition to expand its
portfolio of services: It buying Adaptive Insights, a provider of cloud-based business planning and financial modelling tools, for $1.55
The acquisition is notable because Adaptive Insights had filed for an IPO as recently as May 17.
Workday says that the $1.55 billion price
tag includes ''the assumption of approximately $150 million in unvested equity issued to Adaptive Insights employees& related to that IPO
This deal is expected to close in Q3 of this year.
IPO filings are known to sometimes trigger MA
Most recently, PayPal announced it would acquire iZettle just after the latter filed to go public
Skype was acquired by Microsoft in 2011 while it was waiting to IPO after previous owner eBay said it would spin it off.
Workday itself went
public in 2012 and currently has a market cap of nearly $27 billion.
The deal will give Workday another string to its bow, in its attempt to
become the go-to place for all for back-office services for its business customers: the company plans to integrate Adaptive Insights& tools
into its existing platform.
Adaptive Insights is an industry leader with its Business Planning Cloud platform, and together with Workday, we
will help customers accelerate their finance transformation in the cloud,& said Aneel Bhusri, Co-Founder and CEO, Workday, in a statement
&I am excited to welcome the Adaptive Insights team to Workday and look forward to coming together to continue delivering industry-leading
products that equip finance organizations to make even faster, better business decisions to adapt to change and to drive growth.
The two
have been working together as partners since 2015.
In the case of Adaptive Insights, which says it has ‘thousands& of customers, its
growth mirrors that both of cloud services and specifically about how business intelligence has developed into a distinct software category
of its own over the years, with not just the CFO but an army of in-house analysts relying on analytics of a business& data to help make
small and big decisions.
The marketopportunity hereis huge as the CFO has become apower player in the C-Suite,& CEO Tom Bogan told
TechCrunch when it raised$75 million in 2015, when it first passed the billion-dollar mark for its valuation
Bogan previously also held a role as chairman of Citrix
&As a former CFO myself, I have seen this first hand and it is accelerating.& Other examples of this force includes Twitter AnthonyNoto
catapulting from CFO to COO (and is now a CEO running SoFi)
Around 25 percent of CEOs at Fortune 500 companies are former CFOs.
Adaptive Insights had raised $175 million prior to this.
Bogan will stay
on and lead the business and report directly to Bhusri.
Joining forces with Workday accelerates our vision to drive holistic business
planning and digital transformation for our customers,& said Bogan, in a separate statement
&Most importantly, both Adaptive Insights and Workday have an employee-first and customer-centric approach to developing enterprise software
that will only increase the power of the combined companies.
More generally, while we have certainly seen a much wider opening of the door
for tech IPOs this year, there is also an argument to be made for continuing consolidation it enterprise IT, in particular with regards to
cloud services that might have small or potentially negative margins.
Adaptive Insights was not immune to that: the company in its public
listing filing said that its previous fiscal year brough tin $106.5 million in revenues, up 30 percent from the year before, but it also
posted a loss of $42.7 million in the same period
That was narrower than the $59.1 million it posted in 2016
Combined with the bigger trend of all-in-one platforms packing a bigger punch with businesses, it might have meant that Workday offer was
too compelling to refuse.
This looks like Workday biggest acquisition yet, but the company has been on a spree of sorts: just last week it
announced the acquisition of RallyTeam to beef up its machine learning.
