Craig Schiff , President and CEO, BPM Partners

Overview

Thoma Bravo has announced its planned acquisition of Anaplan for $10.7 billion. Anaplan’s revenues for its most recent fiscal year were $592.2 million with a GAAP operating loss of $200.7 million. Those numbers show how impressive this valuation is. I believe this is the largest acquisition ever in the performance management space (see other recent investments in the space here). The investment of course factors in the huge potential for Anaplan as it continues its successful growth path in the hot performance management space.

Details

With this deal Anaplan will once again become a private company. Why would they choose to do this? The money of course, but there are other reasons. The stock market is brutal, regulatory reporting is painful and time consuming (which is one reason you should buy a performance management consolidation and reporting solution), and the pressure of having to achieve quarterly targets forces compromises to be made. So, not too surprising.

Anaplan is a leader, particularly in the rapidly growing operational planning (or extended planning and analysis) segment. It does have some strong competitors though. While SAP and Oracle are often cited as their chief competitors, you’re just as likely to see OneStream Software or Wolters Kluwer’s CCH Tagetik going head to head with Anaplan in deals, and getting their fair share of wins. While OneStream and CCH Tagetik were initially focused primarily on financial planning, consolidation, and reporting, over time they have added impressive capabilities focused on operational planning. Their combined financial and operational strengths give them an edge over Anaplan in financial planning-led deals that also include operational components.

Thoma Bravo is not new to this space. They are an investor in another performance management vendor, Syntellis Performance Solutions. Syntellis, with their Axiom product, combines financial and operational planning with comparative benchmark analytics. They focus almost exclusively on three verticals: banking and credit unions, higher education, and healthcare, with specialized content for each. While there is certainly overlap with Anaplan’s capabilities, we don’t often see them competing in the same deals. Thoma Bravo also owns Qlik, which several performance management vendors have partnered with for analytics.

Our Assessment

A rapidly growing vendor, a knowledgeable investor, a hot market. Seems like a recipe for success to us.

Further Reading: Hg Acquires Majority Stake in Prophix, Host Analytics to be Acquired by Vector Capital, Longview Acquired by insightsoftware, Adaptive Insights to be Acquired by Workday, Wolters Kluwer Acquires Tagetik