Was Informatica the Strangest Tech Acquisition of All-Time With Microsoft and Salesforce Involved?

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The world of mergers and acquisition can be rather strange. When you include private equity firms in the mix, deals can become even more strange. Now an announcement from Informatica Corp. (NASDAQ: INFA) may take the cake on just how odd certain private equity buyouts can be.

Informatica issued a press release Thursday that marked the successful completion of its acquisition by a company controlled by the Permira funds and Canada Pension Plan Investment Board (CPPIB). What makes this deal so strange was that Informatica additionally announced that Microsoft Corporation (NASDAQ: MSFT) and Inc. (NYSE: CRM), via Salesforce Ventures, both agreed to become strategic investors in the company alongside the Permira funds and CPPIB.

What is odd here is that it is unusual just to include two large public and high-profile companies as investors. It was announced on June 23 that Informatica shareholders approved the deal.

The total acquisition price was valued at roughly $5.3 billion, based upon Informatica shareholders receiving $48.75 in cash per share.

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Informatica today also announced leadership changes, as follows:

  • Sohaib Abbasi, chairman and former chief executive officer, will continue to serve as chairman of Informatica.
  • Anil Chakravarthy, chief product officer, will now serve as the acting chief executive officer of Informatica, effective immediately.
  • Bruce Chizen, former chief executive officer of Adobe, has joined Informatica as a board member and as a special advisor to Informatica.

Sohaib Abbasi, chairman of Informatica, said:

The Informatica goal remains to grow into a multi-billion dollar leader in all things data. Now as a private company, with a long view measured in years, not quarters, we will have more flexibility and more time to implement our transformative innovation roadmap and to evolve our business model. To lead this exciting next phase, I am pleased that Anil Chakravarthy is assuming his new role of acting CEO. It is my distinct honor to also welcome Bruce Chizen, former CEO of Adobe, to Informatica both as a board member and as a special advisor. I have every expectation that the best years for Informatica are yet to come.

Anil Chakravarthy, acting CEO of Informatica, said:

It is a privilege to lead the world-class Informatica team in this promising new phase of growth as a private company. Our transformative innovation roadmap includes four distinct billion-dollar opportunities: cloud integration, next generation big data integration, MDM solutions and data security. And living our customer-first culture, we will evolve our business model to match customers’ preferences for pay-for-use subscription offerings.

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Permira’s quote is what alerted the Microsoft and involvement. That said:

As a testament to the strength and promise of Informatica’s business, we are thrilled to welcome Microsoft and Salesforce Ventures as investors and are excited to support Informatica as it consolidates its position as one of the top software companies globally.

Informatica is going out with a $5.1 billion market cap. The company provides enterprise data integration software and services — in several technology categories, including Cloud Integration, Data Integration for Big Data initiatives, and MDM Solutions. Revenues went just above $1 billion in 2014, and the pool of analysts had revenue estimates of $1.13 billion in 2015 and $1.25 billion in 2016.

What we do not know is how much Microsoft and actually contributed in this $5 billion deal, nor do we know what percentage of the company will be owned by them. Is it possible that Informatica was the source of the “merger rumors” that pointed to a deal?

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