Vista details Apptio sale to IBM; Brookfield Reinsurance scoops up AEL

Good morning dealmakers!

It’s Obey Martin Manayiti here with the Wire, standing in for Chris Witkowsky, who’s on vacation this week.

I hope you all had a nice July 4th holiday. As always, I was mesmerized by the fireworks in the New York area.

Today I am detailing Vista Equity Partners’ Apptio sale to IBM for $4.6 billion, spotlighting an interview with Nadeem Syed, senior managing director and head of value creation at the firm.

I will also look at this morning’s news, starting with Brookfield Reinsurance announcing that it will acquire American Equity Investment Life Holding Company’s outstanding shares of common stock it does not already own in a cash and stock transaction that values Iowa-based AEL at approximately $4.3 billion.

I will close out with ArcLight Capital Partners’ announcement this morning that it will buy the commercial distributed generation business of Duke Energy for an enterprise value of $364 million.

The $4.6bn buzzword
There is something very interesting about Vista Equity Partners’ transactions this year. Several of them are valued at $4.6 billion. In February, the Houston-based PE firm closed the buyout of cybersecurity awareness training provider KnowBe4 in an all-cash transaction valued at $4.6 billion. In June, Blackstone closed its acquisition of Cvent, an events technology provider, from Vista in a transaction valued at an enterprise value of around $4.6 billion. Also in June, Vista announced it is selling Apptio to IBM for $4.6 billion, and we are going deeper into that below.

Digital transformation
As companies navigate the complexities of digital transformation, a new breed of cloud-based software known as technology business management (TBM) has emerged, and Apptio has been a pioneer. Vista acquired Apptio in 2019 in a $2 billion take-private deal.

To learn more about the deal, I turned to Nadeem Syed, senior managing director and head of value creation, who sits on the board of Apptio. He discussed how the Bellevue, Washington-based software developer flourished under the PE firm’s control, with revenue doubling and Ebitda margins increasing by 4x.

Here’s an excerpt from the interview:

Why and how has the CIO’s job gotten more difficult in recent years, and how do Apptio’s offerings help?
Apptio offers a market-leading software platform to help businesses maximize the value of their technology investments. Software and technology have dramatically changed the way the world does business, and it is difficult to understate the complexity facing organizations as they navigate the ongoing digital transformation. On top of that, the covid pandemic accelerated everything, resulting in the wide-scale adoption of cloud computing. Apptio provides mission-critical tools that help optimize IT spend, manage cloud expenses across hybrid and multi-cloud environments, and implement effective financial operations and monitoring tools.

Since the acquisition in 2019, what opportunities were attractive in growing Apptio?
Apptio has a terrific co-founder and CEO in Sunny Gupta. Vista looks to invest in category-defining businesses, and Sunny and his team pioneered technology business management (TBM) software. But what makes Sunny unique is his relentless drive to continue improving, innovating and problem-solving. When we took Apptio private in 2019, the company had a single product called ApptioOne. We’ve since worked with Sunny and his team to expand and diversify Apptio’s platform, which significantly grew the company’s total addressable market and opened new go-to-market channels.

Insurance business
In a deal valued at approximately $4.3 billion, Brookfield Reinsurance agreed to acquire all the outstanding shares of common stock of AEL it does not already own.

“This transaction represents an important step in the continued growth of our insurance business, further diversifying, and scaling, our insurance capabilities, and is a direct result of the partnership we have developed with AEL since our initial investment in 2020,” said Sachin Shah, Brookfield Reinsurance CEO.

Shah said with this transaction, Brookfield Reinsurance has now deployed or committed over $10 billion of capital since its inception, and that brings the total insurance assets to over $100 billion.

Power up
Boston-based ArcLight Capital Partners announced this morning that it has reached an agreement to buy the commercial distributed generation business of Duke Energy for an enterprise value of $364 million. The deal is expected to close by the end of the year.
The distributed generation business being acquired includes REC Solar operating assets, development pipeline and O&M portfolio, as well as distributed fuel cell projects managed by Bloom Energy.

“Our investment in Duke Energy’s commercial distributed generation business supports ArcLight’s long-standing strategy of acquiring operating assets from leading strategics and creating strong stand-alone renewable platforms,” said Marco Gatti, ArcLight’s managing director.

“We believe this is an attractive opportunity to acquire a first-rate commercial distributed generation portfolio, partner with a talented team and build upon longstanding, high quality customer relationships,” he added.

That’s it for me today.

Please let us know what you are seeing in the market, or send a scoop on the latest deal or trends to me at obey.m@peimedia.com.

PE Hub editor-in-chief MK Flynn will be back with you tomorrow.

Have a nice day.

Cheers,

Obey