Adaptive Insights pulls an IPO bait-and-switch with a $1.55B sale to Workday

With software companies commanding sky-high buy prices, Adaptive Insights sells to Workday for $1.55B.


June 12, 2018

Adaptive Insights, a cloud business planning platform that filed for an IPO just a few weeks ago on May 17 with an expected $600m valuation, found a better option yesterday: A $1.55B sale to Workday.

Ahhh, the ol’ IPO-acquisition shootout…

IPO announcements often provoke big companies with itchy trigger fingers and lots of financial ammo to acquire from the hip. This Workday buyout, like the recent PayPal-iZettle deal, is a perfect example of that strategy.

With software acquisitions on a hot streak in 2018 — Microsoft-Github ($7.5B), Salesforce-MuleSoft ($6.8B), Adobe-Magento ($1.68B) — Adaptive Insights chose a great time to IPO (or threaten to). But why would Workday shell out such a premium?

Workday has more cash than time

Workday, which makes an on-demand platform for finance and HR, went public in 2012 at an unexpectedly high valuation of $9.5B — but in the past 6 years the company has grown into a $27B HR colossus.

With stock up 27% over the past year, Workday has even more cash than usual — which it has used to buy several businesses that will help Workday scale its machine-learning cloud solutions faster (first SkipFlag, then Rallyteam, now Adaptive Insights).

The Adaptive Insights acquisition will accelerate Workday’s product development by 2-3 years, CEO Aneel Bhusri told the WSJ.

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