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.
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, 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.
You know what they say: if you love what you do…