Workday Announces Acquisition of Adaptive Insights

Highlights: 

• Workday announced it is acquiring Adaptive Insights for $1.55bn, or 14.2x LTM sales. 
• Adaptive had filed for an IPO last month and was set to go public in a few days. 
• In FY18 Adaptive crossed the $100 million revenue threshold and had $100 million in annual recurring subscriptions under contract. 
• This is Workday's third acquisition in 2018. 

Transaction Details: 

Adaptive Insights focuses on cloud corporate performance management (CPM) and has more than 3,500 customers in 50 countries. The company's Adaptive Suite enables companies of all sizes to collaboratively plan and model, easily access real-time analytics, streamline complex financial reporting, and accelerate financial consolidation.

Founded in 2003, the company had LTM revenue of $107 million and has been growing at approximately 30% YoY. It had raised a total funding of $176 million, with the most recent round being in 2015 at an estimated $453 million valuation. The company was planning to raise $115 million in an IPO that would have valued the company at $705 million.

Workday agreed to buy Adaptive for about $1.55 billion in cash and will combine it with its application suite for finance and HR. It will acquire all of Adaptive's outstanding shares, including $150 million of unvested equity issued to Adaptive employees. The transaction is expected to close in the fall.

This is Workday's third acquisition this year and its largest ever by dollar value. In June, Workday acquired machine learning firm Rallyteam and in January  it acquired deep learning firm SkipFlag.