Talend to be acquired by Thoma Bravo for $2.4 billion

Talend entered into an agreement to be acquired by Thoma Bravo for $2.4 billion.

Talend, founded in 2004 and based in Redwood City, Calif., is a data integration specialist whose platform enables customers to combine information from disparate sources into unified data sets that can subsequently be used for analytical analysis. Thoma Bravo, meanwhile, is a private equity firm founded in 2008 and based in Chicago with $70 billion of assets under management.

Under the terms of the agreement between Talend and Thoma Bravo revealed March 10, Talend will be acquired for $66 per share, which represents a premium of about 29% to Talend's closing price of $51.30 on March 9.

Talend's board of directors unanimously approved the acquisition, according to a release.

The deal, which is expected to close during the third quarter, demonstrates the value organizations are now placing on data integration. With data collected not only from more sources than ever before but also in greater volume, organizations need to be able to integrate all that data into cohesive data sets they can then use to drive decision-making.

Previously among data integration vendors, Informatica was acquired in 2015 by Permira and the Canada Pension Plan Investment Board for $5.3 billion, MuleSoft was acquired by Salesforce in 2018 for $6.5 billion and on March 2 Centerbridge Partners sold Precisely, which it had acquired in 2017, to private equity firms Clearlake Capital Group and TA Associates for $3.5 billion.

"Data integration is a hot market right now," said Noel Yuhanna, principal analyst at Forrester Research. "Most organizations we speak to struggle with integrating data on premises, and the cloud makes it worse. Organizations are demanding more real-time, self-service and integrated data capabilities to support modern business applications and insights."

Doug Henschen, principal analyst at Constellation Research, added that it's not only data integration that's hot right now -- it's technology as a whole. And given that Talend is a well-established vendor with a strong customer base, history of growth, and solid software maintenance and subscription revenues, it was an attractive acquisition candidate.

"Private equity firms are after solid returns," he said.

As for continued growth, the analysts said that if history is a guide, getting acquired by Thoma Bravo won't be a hindrance for Talend.

Christal Bemont, who took over as Talend's CEO in January 2020 after former CEO Mike Tuchen stepped down following six years at the vendor's helm, said in a statement that the deal will provide Talend the capital, resources and expertise to reach its goals and deliver on its mission of enabling organizations to become more data-driven.

Data integration is a hot market right now. Most organizations we speak to struggle with integrating data on premises, and the cloud makes it worse.

Among the goals Bemont, who came to Talend after 15 years at SAP Concur where she oversaw the expense and travel management platform's conversion from on premises to the cloud, set for Talend were to improve its performance in the cloud and set the vendor on a path to grow its revenues from $250 million annually to $1 billion.

On Feb. 10, Talend reported total revenue in 2020 of $287.5 million, up from $247.8 million in 2019.

Similarly, Steve Singh, Talend's chairman, said in a statement that the acquisition will be a long-term benefit for the vendor's customers, employees and other stakeholders.

Meanwhile, Thoma Bravo's acquisition of Talend isn't the private equity firm's first foray into the realm of analytics. In 2016, Thoma Bravo acquired analytics vendor Qlik for $3.0 billion.

Since then, just as Talend is in the process of improving its cloud operations and expanding its presence in the cloud, Qlik has shifted its focus from on premises to the cloud. In addition, it has expanded its capabilities through a series of acquisitions, going from being focused simply on business intelligence to providing a full-featured analytics platform featuring augmented analytics capabilities.

Qlik's acquisitions of Attunity and Podium Data added data management capabilities, its purchase of CruchBot improved its natural language processing capabilities, and most recently, its acquisition of Blendr.io added data integration capabilities.

"After an initial period of executive turnover and a modest level of layoffs ... things settled down at Qlik and I've subsequently seen significant investment in the business, including organic development and the acquisitions," Henschen said. "That should be an encouraging example for Talend customers."

It's too early to know whether the acquisition will trigger layoffs at Talend.

Similarly, Yuhanna said Qlik has done well since being acquired by Thoma Bravo.

"We don't believe Thoma Bravo has gotten in the way of Qlik's strategy," he said. "Qlik has done exceptionally well under Thoma Bravo. Not only has Qlik been expanding its core data capabilities, driving innovation, and expanding into new markets, it acquired some data and analytics vendors, which has helped it expand its platform to become one of the key players in the data management space."

Talend's acquisition by Thoma Bravo remains subject to regulatory approval and other Due diligence measures before closing. In addition, the acquisition agreement includes a 30-day "go-shop" period ending April 10 under which Talend is free to explore other potential buyers.

If its deal with Thoma Bravo is completed, once Talend is acquired it will revert to becoming a private company after going public in 2016.