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With Thoma Bravo, Apttus could be as big as Salesforce or SAP: executive chair

David Murphy, Apttus Corp’s newly minted executive chairman, has big plans for the middle-office-software company now that it’s owned by Thoma Bravo.

The technology-focused private equity firm closed its buy of a majority of Apttus last week. The deal, announced in September, was valued at $1 billion to $2 billion, according to press reports.

Apttus is the San Mateo, California, provider of quote-to-cash software built on the Salesforce platform. The technology records the steps from when a customer requests a price quote to final payment, Digital Commerce reports.

Apttus funding

A trio of software executives, including Kirk Krappe, Neehar Giri and Kent Perkocha, launched Apttus in 2006. Apttus — derived from the Latin for deep capability and speed — waited seven years before it raised its first round. That was $37 million in 2013.

It has since collected a total of $404 million, including $75 million in expansion funding in February, PitchBook said. Investors include K1 Investment Management, Salesforce, Iconiq Capital and IBM Ventures.

The sale to Thoma Bravo provided an exit for some shareholders, like K1, which sold its stake. Not everyone cashed out. Many investors, including Salesforce, rolled over a portion of their stake, a source said. Apttus’s founders are staying on as investors, Murphy said.

Murphy is excited by the sale to Thoma Bravo. “It’s a very important shift for the company to tackle the next phase of growth with private equity,” he said in an interview with Buyouts. “Our mission is to build a very large, important provider in the middle office. We think Apttus is in the best position to do that.”

Apttus, Murphy said, can be as big as Salesforce or SAP. He noted that the company has a long way to “realize that vision.”

The company produces about $250 million in revenue. It’s growing by 30 percent to 40 percent annually and “is on a path to be a stand-alone billion-dollar-plus business,” Murphy said.

It currently employs 1,200 and Murphy expects Apttus to double its staff on its way to $1 billion-plus.

With the sale to Thoma Bravo, Apttus appears to have called off its plans to go public. That’s not necessarily the case. The company is keeping all its options open, including an IPO, Murphy said.

“There is no question we intend to continue to build Apttus as a complete business that can be a stand-alone company or a stand-alone public company,” he said.

Apttus, however, is not considering an IPO “in the short order,” Murphy said. The company is looking to build out its operational scalability, which Murphy said is much easier to do as a private company.

The prospects for an IPO appear more tenuous considering Murphy’s background.

Murphy is former president and COO of Blue Coat Systems, which, when it was owned by Bain Capital, was also expected to go public. Instead, just two weeks after Blue Coat filed for an IPO, the company in June 2016 agreed to sell itself to Symantec for $4.65 billion.

Murphy, a Thoma Bravo senior operating partner, joined Apttus with the sale.

Search for a CEO

Thoma Bravo used its most recent flagship, Fund XII, which closed on $7.6 billion in 2016, to invest in Apttus. The Chicago PE firm is marketing its latest fund, which is seeking about $10 billion, Bloomberg reported.

Apttus is still in the hunt for a CEO, Murphy said. Krappe, Apttus’s founding chief executive, left the company on July 2, just weeks before the sale to Thoma Bravo.

Apttus in response created an office of the CEO. It is composed of three executives: Perkocha, co-founder and chief customer officer; Giri, co-founder, president and chief solutions officer; and Raj Verma, chief operating officer.

Murphy also joined the office of the CEO. “I’m very comfortable providing leadership. … For the time being, there is a CEO search that was announced previously and continues to be under way,” Murphy said.

Action Item: Contact David Murphy at +1 650-445-7700