Microsoft And Salesforce Join In $5.3 Billion Buyout Of Informatica

Sixteen years after going public at the height of the dotcom bubble, Informatica is looking to rewind the clock. The Redwood City, Calif.-based data integrator announced Thursday it had completed its acquisition by private equity interests controlled by the Permira funds and Canada Pension Plan Investment Board, for a price tag of about $5.3 billion.

Informatica delisted from the NASDAQ, retiring the INFA ticker, and announced that chief product officer Anil Chakravarthy will now serve as acting CEO. Former CEO Sohaib Abbasi remains chairman of the company, which claims 5,800 enterprise customers.

The newly-private Informatica will also have several key strategic investors as it charts a new course: Microsoft and Salesforce Ventures both invested in the company as part of the deal, though how much of a stake they acquired was not disclosed, according to Informatica’s release on the news.

“Informatica has been a strong part of Microsoft’s partner ecosystem as a data integration leader and we are excited to support Informatica in this new stage of growth as a private company," a Microsoft spokesperson told Forbes.

Informatica’s shareholders had approved an acquisition by the Permira funds and CPPIB back in June, after the company reportedly received competitive bids from several firms earlier in the spring. Reuters had reported in March that several groups including one consisting of Silver Lake Partners and Hellman & Friedman were preparing bids for April as the stock hit a then-peak of $45.45 (the final sale price was $48.75, up 7%). Informatica had attempted to sell through an auction back in January, according to Reuters.

The sale had come with some turbulence from investors before its eventual approval. In April, one year after Informatica returned to the NASDAQ to celebrate its fifteenth anniversary on the exchange, several shareholder rights law firms announced investigations into the sale process, specifically to determine if the $48.75 share price was the best option Informatica could get.

But Informatica couldn’t ultimately find a better option for its $1 billion in annual revenue business, which grew just 10% on constant currencies in Q2 of 2015 on software revenue growth of 13% and subscription growth of 44% year-to-year. That rate of growth was essentially flat from the year before. Like competitor Tibco, Informatica had fallen into a low-growth, mature sales cycle after seeing its stock soar and then crater when the dotcom bubble burst. Both had eventually regrown into multi-billion valuations, but after years of sales growth to get back where they were. Tibco was taken private in December for about $4.3 billion, $1 billion less than Informatica.

If Informatica can find new opportunities without quarterly earnings to hold it to the same sales cycle, Salesforce and Microsoft would appear to get early hooks into that potential business for relatively low total commitments. Salesforce declined to comment on the deal.