Microsoft CEO Satya Nadella and Salesforce boss Mark Benioff have a common love. And it’s not a person, a Ferrari or even a Hawaiian Island they want to own.
It’s data integration leader Informatica.
Private equity interests controlled by the Permira funds and the Canada Pension Plan Investment Board (CPPIB) completed the acquisition of Informatica today for about $5.3 billion. Both Microsoft and Salesforce — or, specifically, Salesforce Ventures — have agreed to become strategic investors in the company alongside the Permira funds and the CPPIB.
So after 16 years as a public company, Informatica delisted from the NASDAQ and retired its INFA ticker.
Why the Exit?
What’s the reason for going private? Being able to focus on the future over the long haul instead of catering to the whims of Wall Street, it seems.
“It is a privilege to lead the world-class Informatica team in this promising new phase of growth as a private company,” said Anil Chakravarthy, acting chief executive officer, Informatica.
“Our transformative innovation roadmap includes four distinct billion-dollar opportunities: cloud integration, next generation big data integration, MDM solutions and data security. And living our customer-first culture, we will evolve our business model to match customers’ preferences for pay-for-use subscription offerings.”
And pay-for-use subscription offerings take time to ramp-up before you can glean the kind of revenue Wall Street tends to demand. Serving impatient shareholders and doing what’s right for the customer and over the long term can be difficult, just ask Box.
But the likes of Benioff and Nadella are well equipped to understand this — look where Microsoft is going with Windows and Azure. Not only that, but because Salesforce and Microsoft collaborate with Informatica they have a vested interest.
Going Back to Private
Industry watchers will likely remember that fellow data company Tibco went private last year for similar reasons. Ditto for Dell.
“In going private, it gives us a great opportunity to plan for the long term,” Chakravarthy said. “It lets us invest in products that can really shape our future.”