APTI Apptio, Inc.

By Laura Cooper and Jay Greene 

Tech-focused private-equity firm Vista Equity Partners struck a deal to take software company Apptio Inc. private for $1.94 billion.

Under the agreement, Apptio shareholders will get $38 a share, representing a 53% premium to Friday's closing price of $24.85. The Wall Street Journal reported earlier Sunday that a deal was imminent.

The purchase price is below Apptio's all-time closing high of $41.23, hit about two months ago. Its shares have fallen recently as part of a broader slide in technology stocks. In late October, Apptio reported third-quarter results that included weaker-than-expected billings, further pressuring its shares.

Apptio provides tools to help corporate tech buyers keep track of the software and services they use to better manage their costs. The company says its customers include Unilever PLC, JPMorgan Chase & Co. and Cisco Systems Inc.

The Bellevue, Wash., company went public two years ago, raising about $96 million at $16 a share.

Co-founder and Chief Executive Sunny Gupta and his family have been Apptio's largest shareholders, collectively holding stock that gave them more than 46% voting power, according to a proxy statement the company filed in April. Since then, Apptio converted the class of its stock that had greater voting rights into common stock, reducing Mr. Gupta's control. Some of the venture-capital firms that initially backed Apptio, including Madrona Venture Group, have sold significant stakes this year.

The deal comes amid market volatility, coupled with tech-focused private-equity firms raising an avalanche of capital for deals. Austin, Texas-based Vista is raising its latest flagship Vista Equity Partners Fund VII LP, aiming to collect $16 billion for deals in the enterprise-software space. It had raised $11.4 billion toward that goal as of late September, The Wall Street Journal reported.

The purchase of Apptio is Vista's first take-private deal this year, but the firm is no stranger to shopping in the public market. Last year, it paid about $1.55 billion to buy software and consulting company Advisory Board Co.'s education division, taking the company private alongside UnitedHealth Group Inc., which bought its health-care unit.

Two years ago, Vista took marketing-services software provider Marketo Inc. private for about $1.79 billion. It sold Marketo to Adobe Inc. for $4.75 billion this year. Vista is weighing a sale of advertising-software provider Mediaocean LLC that could value it at more than $1.5 billion, the Journal has reported.

Write to Laura Cooper at laura.cooper@wsj.com and Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

November 11, 2018 23:56 ET (04:56 GMT)

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