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Founder Vision, Value Creation and Scale Attracts IBM in Vista’s Sale of Apptio

Founder Vision, Value Creation and Scale Attracts IBM in Vista’s Sale of Apptio

Posted on: Jun 26, 2023

At Vista, it brings us tremendous satisfaction to help founder-led businesses realize their vision and reach new milestones for their stakeholders. Today, we are pleased to announce that Apptio has agreed to be acquired by IBM for $4.6 billion.

At a time when exit activity within private equity has fallen considerably, Vista has continued to maintain its momentum. Since November 30, 2021, the Firm has completed or signed 18 monetization events across full and partial exits, recapitalizations, block sales and a follow-on offering. Across these events, we have generated $18.0 billion in total value, including monetizations of $14.3 billion (including co-investment) and $3.7 billion in unrealized value still to be captured.

The Apptio transaction is an example of Vista’s investment discipline and focus on value creation. Apptio CEO and Co-Founder Sunny Gupta’s vision was rooted in an obsession for solving customer challenges. During his time as EVP of Products at Opsware, he recognized a significant whitespace for how organizations optimize the ROI of their IT stack. This led him to launch Apptio in 2007 and establish a new software category – Technology Business Management (TBM) – an analytics-based business management system for CIOs.

As investors, we were immediately drawn to what Sunny and his team were doing. Not only were they innovating an entirely new category with tremendous growth potential, but Sunny was also an established visionary founder having co-founded iConclude, which pioneered the IT runbook automation market through its acquisition by Opsware.

We closely tracked Apptio’s performance for several years. In early 2016, we met and began building a relationship with Sunny as the company was evaluating its eventual IPO in September of that year. We re-engaged with Sunny and his team and took the company private in 2019.

Apptio chose to partner with Vista because of our growth mentality, commitment to innovation and deep operational expertise. We believed that together, we could build a comprehensive platform for companies to better manage their technology spend while positioning Apptio for long-term growth and success.

A primary benefit of the Vista partnership is our approach to value creation which prioritizes product superiority and innovation. Leveraging our value creation expertise, Apptio was able to expand and diversify its product set, increase customer adoption and enhance operational efficiency. Vista helped Apptio remain forward leaning on innovation, further enhancing the company’s machine learning capability with the acquisition of Cloudability in 2019. In all, we supported Apptio through five acquisitions.

The combination of organic and inorganic growth levers allowed Apptio to expand from a single product to a comprehensive IT financial planning platform. This significantly grew the company’s total addressable market and opened new go-to-market channels. Over the course of our partnership, total revenue doubled while EBITDA margins increased by more than 4x. Apptio grew its customer base by more than 3.3x and currently serves more than 60% of the Fortune 100.

Our results in a challenging macro-economic environment are a testament to the collective talent of our companies and Vista investment and value creation teams, and our commitment to delivering consistent returns to our investors. We look forward to continuing to drive transformative change in the global economy through the power of enterprise software.

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