Informatica Heads Private in $5.3 Billion Deal with Permira

Enterprise data integration software provider Informatica (INFA) will be taken private in a $5.3 billion deal with European equity firm Permira Advisers and the Canada Pension Plan Investment Board (CPPIB).

Informatica shareholders will receive $48.75 in cash for each share of common stock. The deal is expected to close in Q2 or Q3 this year, Informatica said, pending shareholder and regulatory approval.

Activist hedge fund Elliott Management is Informatica’s largest shareholder at an 8 percent stake, which it disclosed in an SEC filing in January, at the time describing the software company’s issues as “significantly undervalued,” noting it had “initiated a dialogue” to “maximize shareholder value.”

Last December, Elliott parlayed its 9.65 percent stake in Riverbed into a buyout by private equity firm Thoma Bravo after repeatedly calling the WAN optimizers’ stock undervalued. And, last September, IT solutions provider Compuware entered into a $2.5 billion deal with Thoma Bravo after Elliott, a 9.5 percent stakeholder in the company, pressured it to sell.

So it wasn’t surprising when Sohaib Abbasi, Informatica chairman and chief executive, said the company’s board examined its “strategic alternatives” and concluded the deal was “in the best interest of all Informatica stakeholders.”

Brian Ruder, a partner at Permira partner with co-responsibility for its IT sector team, said Informatica’s move to the cloud and subscription-based services keyed the deal.

“We are very excited about the company’s ongoing transition to cloud and subscription based services, as well as its continued pursuit of four separate billion dollar market opportunities in cloud integration, master data management, data integration for next generation analytics, and data security,” he said.

Not to be left out, Jesse Cohn, who’s become a formidable figure in IT in the last year from his perch as Elliott senior portfolio manager and head of U.S. Equity Activism, said, “Sohaib has built a great company with a market leading product portfolio and today he and his board have delivered truly outstanding value to shareholders.”

For Q4 2014, Informatica reported a 10 percent increase in sales from last year to $303.7 million and a 7 percent GAAP spike in net income to $65.4 million. The company posted revenue increases in software, licenses and subscriptions.

Informatica’s shares are up some 25 percent on the year. The company’s market cap stands at $5.02 billion.