Two months ago, private equity firm Vista Equity Partners said it would pay $1.94 billion for the Bellevue, Wash.-based company, which helps companies track their spending on IT and cloud services. Two days before the deal was announced, Gupta reported to regulators that he and his family trust owned a little over 5 million shares.
The $38 per share closing price was a 53 percent premium on the market value of Apptio’s shares. But Vista still managed to pay less than the all-time high of $41.23 that the stock reached over the summer before falling in a widespread market pullback.
Apptio did not respond to requests to confirm Gupta’s stake in the company.
“The resources and financial strength of Vista will allow Apptio to enter our next chapter of growth, maintain our commitment and passion for customers, and cement our leadership position in fueling digital transformation at hundreds of organizations of all sizes around the world,” Gupta said in a statement.
Vista’s deal was the largest IT takeover in the U.S. last year and ranked twelfth among all buyouts, according to PitchBook data.
Gupta controlled 46 percent of the voting power in the company prior to a change last year, which converted the class of stock that gave him greater voting rights into common stock, The Wall Street Journal reported.
Private equity has its share of critics, who argue take-private deals often enrich owners at the expense of the business and its workers. The industry’s reputation was damaged by decades of backlash against leveraged buyouts, which still produce scare stories. Toys “R” Us, which in 2018 finally gave in to the weight of its debt obligations, was the most recent example.
Gupta said at the time of the deal that Vista wasn’t interested in cutting costs. “We get to go private and we get to accelerate growth in the private markets, which sometimes can be harder to do in the public markets because of the fickleness or whatever may happen in the public market,” he told GeekWire in November.
Gupta also pointed to Marketo, which was acquired by Vista in 2016 for $1.8 billion. Two years later, Adobe bought the company for $4.75 billion. Apptio isn’t profitable, but its annual revenue has grown at around 20 percent since it went public just over two years ago.
In the pre-IPO days, Gupta envisioned that Apptio would become Seattle’s next large enterprise software company, telling GeekWire in 2013 that he planned to build the Salesforce for IT professionals. The tech entrepreneur jumped into Apptio shortly after selling software company iConclude for $60 million in 2007.
Gupta will stay on as CEO of Apptio, and its headquarters will remain in Bellevue, where around half of its 850 employees work.