Yesterday evening, we announced that Apptio has entered into an agreement to be acquired by Vista Equity Partners for $1.94 billion ($38.00 per share). Below, I’ve included a portion of the note that I shared with all Apptio employees when the news broke yesterday.
I could not be more proud of the company we’ve built because of the hard work of every Apptio employee. This wouldn’t be possible without the incredible support I’ve received from my executive team and our Board of Directors. I know this is the right decision for Apptio’s shareholders and we all look forward to what the future brings after Apptio becomes part of the Vista family.
Living your dream is a funny thing. When you live your dream, you’re met with the awareness that you’ve done it. Your hard work has turned into something real. Your vision was validated by the market. The initial goals you started with were met. But living your dream also means you have to answer the question: what’s next?
Just a few moments ago, we announced that Apptio has agreed to be acquired by an affiliate of Vista Equity Partners. I am excited about this next chapter and the opportunity it gives us to continue building and scaling Apptio. The entire leadership team and I remain eager to accelerate our mission to bring Apptio to everyone.
Eleven years ago this week, Kurt Shintaffer, Paul Mclachlan and I sat in the Bellevue library and fulfilled our dream to launch Apptio. We set out to create a software company that would change the way an entire industry worked. Since that day, we’ve worked tirelessly to live out this dream and have been fortunate enough to have your passion, dedication, and support along the way. Together, we have climbed a mountain that the majority of companies never even approach. Together, we’ve revitalized the role of technology leaders, changed the lives of countless professionals, and built a truly great software company along the way.
Today represents the next chapter in our journey. Our board of directors made the decision to enter into an agreement where Apptio would be acquired for approximately $1.94 billion in cash ($38 per share) by an affiliate of Vista Equity Partners, a leading investment firm focused exclusively on software, data, and technology-enabled businesses. Vista’s portfolio of over 50 companies, taken together, represents the fourth largest enterprise software company in the world. In addition to capital, Vista brings operational expertise and experience specific to high-growth SaaS companies like ours.
One of the responsibilities of our board and executive leadership team is to maximize shareholder value. This past week, following our largest and most successful TBM Conference ever, our board decided that entering into an agreement with Vista would be the best option for our current shareholders and Apptio’s future growth. This move will support our long-term goals and create real value for our shareholders, which includes most of our team. This deal represents a 53% premium to the closing price of our stock on November 9, 2018 and is a huge vote of confidence for our mission, innovation and our future.
We will continue to direct all of our energy to what we have done for so long: provide you, our customers, with leading solutions to manage, plan and optimize technology investments across on-premise and cloud. Vista’s support allows us to accelerate the strategic product roadmap many of you heard about last week during the TBM Conference as well as all current and future customer commitments. We remain deeply committed to creating wildly successful customers and our partnership with you will always be our top priority. Nothing changes in our partnership, people and commitment to you – Apptio will continue business as usual.
I know the question top of mind for most of you is: what does this mean for me as an Apptian?
Vista is a unique investment firm. They have pioneered an investment and operating model for market-leading SaaS companies with substantial untapped opportunity ahead of them. I’d encourage you to disregard any impressions you have of how private equity operates, as Vista is different. They take a long-term outlook and invest in their companies’ growth. And the Vista ecosystem—over 50 software companies with more than 60,000 employees worldwide—provides the types of resources and institutional knowledge not available to individual software companies. Vista is committed to investing in our growth and investing in our talent, and we will be a stronger company for it.
You may also know Vista as the company that acquired Marketo in 2016 for $1.7 billion (and recently sold them to Adobe for $4.75 billion). They believed in and applied their best practices to Marketo, significantly expanding their customer footprint. They did this by increasing growth through product innovation, sales and marketing investments, and strategic acquisitions. In two years, Marketo was the industry’s leading platform with triple the revenue. The attraction to Apptio is similar. Many of you know that our vision has always been “Apptio for Everyone,” meaning we will bring Apptio to companies of all sizes, geographies and industries. Vista believes in this mission and sees Apptio as the next great platform to bet on for Technology Business Management.
As we look to the next chapter of Apptio, our executive team remains deeply committed to our mission, product innovation, geographical expansion, and the work of the TBM Council. The only thing that changes is our opportunity to accelerate our growth, product roadmap, and market leadership as a private company rather than operating in the public market. I remain very committed to our business and will continue as Apptio’s CEO.
The pressure, fluctuations and uncertainties of the public markets make it harder for us to experiment, innovate and grow the way we want. But privately, with the resources that Vista brings to bear, doors open to things like expanded M&A strategies and other initiatives to accelerate our vision.
The most important thing for you to know is things will remain business as usual for Apptio. Right now, our biggest priority is finishing out Q4 strong and gearing up for a successful 2019. Our investors may be changing, but all of our priorities, plans and people remain in place.
Personally, I couldn’t be more excited about this next chapter in the Apptio story. I look forward to hearing from you all today and over the next few days.
Additional Information and Where to Find It
This communication is being made in respect of the proposed transaction involving Apptio, Inc. (“Apptio”) and Bellevue Parent, LLC (“Bellevue”). In connection with the proposed transaction, Apptio intends to file and furnish relevant materials with the Securities and Exchange Commission (the “SEC”), including a proxy statement on Schedule 14A. Promptly after filing its definitive proxy statement with the SEC, Apptio will mail the definitive proxy statement and a proxy card to each stockholder of Apptio entitled to vote at the special meeting relating to the proposed transaction. This communication is not a substitute for the proxy statement or any other document that Apptio may file with the SEC or send to its stockholders in connection with the proposed transaction. The proxy statement described above will contain important information about the proposed merger and related matters. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF Apptio ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PROPOSED TRANSACTION THAT Apptio WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT Apptio AND THE PROPOSED TRANSACTION. The definitive proxy statement and other relevant materials in connection with the proposed transaction (when they become available), and any other documents filed by Apptio with the SEC, may be obtained free of charge at the SEC’s website (http://www.sec.gov) or at Apptio’s website (http://www.apptio.com) or by contacting Apptio’s Investor Relations at firstname.lastname@example.org.
Participants in the Solicitation
Apptio and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Apptio’s stockholders with respect to the proposed transaction. Information about Apptio’s directors and executive officers and their ownership of Apptio’s common stock is set forth in Apptio’s proxy statement on Schedule 14A filed with the SEC on April 19, 2018, and Apptio’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which was filed with the SEC on February 21, 2018. Additional information regarding the potential participants, and their direct or indirect interests in the proposed transaction, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with SEC in connection with the proposed transaction.
Notice Regarding Forward-Looking Statements
This communication, and any documents to which Apptio refers you in this communication, contains not only historical information, but also forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Apptio’s current expectations or beliefs concerning future events, including but not limited to the expected completion and timing of the proposed transaction, expected benefits and costs of the proposed transaction, management plans and other information relating to the proposed transaction, strategies and objectives of Apptio for future operations and other information relating to the proposed transaction. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “intends,” “forecasts,” “should,” “estimates,” “contemplate,” “future,” “goal,” “potential,” “predict,” “project,” “projection,” “target,” “seek,” “may,” “will,” “could,” “should,” “would,” “assuming,” and similar expressions are intended to identify forward-looking statements. You should read any such forward-looking statements carefully, as they involve a number of risks, uncertainties and assumptions that may cause actual results to differ significantly from those projected or contemplated in any such forward-looking statement. Those risks, uncertainties and assumptions include, (i) the risk that the proposed transaction may not be completed in a timely manner or at all, which may adversely affect Apptio’s business and the price of the common stock of Apptio, (ii) the failure to satisfy any of the conditions to the consummation of the proposed transaction, including the adoption of the merger agreement by the stockholders of Apptio and the receipt of certain regulatory approvals, (iii) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement, (iv) the effect of the announcement or pendency of the proposed transaction on Apptio’s business relationships, operating results and business generally, (v) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction, (vi) risks related to diverting management’s attention from Apptio’s ongoing business operations, (vii) the outcome of any legal proceedings that may be instituted against us related to the merger agreement or the proposed transaction, (viii) unexpected costs, charges or expenses resulting from the proposed transaction, and (ix) other risks described in Apptio’s filings with the SEC, such as its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. Forward-looking statements speak only as of the date of this communication or the date of any document incorporated by reference in this document. Except as required by applicable law or regulation, Apptio does not assume any obligation to update any such forward-looking statements whether as the result of new developments or otherwise.