The move reflects a broader trend where private equity firms acquire software companies transitioning to the cloud.
Data management and analytics vendor Alteryx agreed to be acquired by private equity firms Clearlake Capital Group and Insight Partners for $4.4 billion. The deal, expected to close in the first half of this year. The deal was announced in late December.
Alteryx has been transitioning from on-premises to cloud-native tools, a move that private equity firms have historically supported in data management and analytics companies. The acquisition provides Alteryx with financial flexibility and time to reorganize, particularly as it lags in cloud adoption compared to peers.
Analysts highlight that going private will remove scrutiny, allowing Alteryx to advance its cloud-native capabilities without the pressures of quarterly reporting. The private equity firms Clearlake Capital Group and Insight Partners aim to support Alteryx’s continued growth and development. While customers may benefit from an accelerated transition to the cloud, the emphasis is on the new owners to invest in the company’s future without imposing drastic cost-cutting measures.
The acquisition reflects a broader trend where private equity firms invest in software companies transitioning to the cloud. Alteryx, with over 8,000 customers, is expected to leverage this move to strengthen its position and enhance its focus on product development. Its customers appear hopeful, with some continuing reservations.
Slow Growth Triggers Acquisition
After a robust fourth quarter in 2022 with a 75% year-over-year revenue increase, Alteryx experienced a decline, with growth falling below 8% in the third quarter of 2023. The company’s stock peaked at over $178 per share in July 2020 but dipped below $30 per share in August 2023. Analysts noted that the acquisition wasn’t surprising as Alteryx had announced that it was exploring a sale after several quarters of poor results.