IBM announced Monday that it reached an agreement with Vista Equity Partners to purchase Apptio Inc. for $4.6 billion, with some Texas partners from Kirkland & Ellis heavily involved.
Apptio, a developer of financial and operational IT management and optimization software, will be acquired with available cash on hand, the Armock, N.Y.-based technology giant said. The transaction has to clear regulators and is expected to close in the latter half of 2023.
IBM said the acquisition will accelerate the advancement of its IT automation capabilities and enable enterprise leaders to deliver enhanced business value across technology investments.
Paul Weiss was outside counsel to IBM led by corporate partners Steven Williams, Laura Turano and Scott Barshay.
Kirkland represented Austin-based Vista led by corporate partners Stuart Casillas in the Bay Area, Brittany Sakowitz in Houston and Austin and Christian Atwood in Boston.
The team also included tax partners David Kung and Heidi Yuen; debt finance partner Doug Tedeschi; technology and IP transactions partners John Lynn and Daisy Darvall; and executive compensation partner Rohit Nafday.
Sakowitz also assisted Bellevue, Wash.-based Apptio on its purchase of Cloudwiry Inc. in Austin this past December for an undisclosed sum.
In 2018, Vista bought the then publicly traded Apptio for $1.94 billion in cash, or $38 per share, a 53 percent premium over the previous closing day’s price. Kirkland also advised Vista on that deal led by partners out of New York, Boston and the Bay area.
Robert F. Smith, founder, chairman and CEO of Vista, said in the press release announcing the deal that the firm is committed to building “resilient” enterprise software companies, which has proven to be highly attractive to strategic and financial buyers “as well as public markets.”
Apptio has more than 1,500 clients, serving over half of the Fortune 100. Apptio partners and integrates with companies such as Amazon Web Services, Microsoft Azure, Google Cloud Platform, Salesforce, ServiceNow, Oracle and SAP, consistent with IBM’s commitment to an open partner ecosystem.
“Technology is changing business at a rate and pace we’ve never seen before. To capitalize on these changes, it is essential to optimize investments which drive better business value, and Apptio does just that,” IBM CEO and chairman Arvind Krishna said in the press release. “Apptio’s offerings combined with IBM’s IT automation software and watsonx AI platform, gives clients the most comprehensive approach to optimize and manage all of their technology investments.”
Organizations are digitally transforming their businesses faster than ever, causing IT environments to expand across public and private clouds with multiple service providers, IBM said. To manage this increase in complexity, clients are turning to Apptio’s solutions for integrated and simplified visibility into technology spend across hybrid and multi-cloud environments, labor and associated resources.
Apptio, together with IBM’s IT automation software and it’s watsonx AI platform, will help businesses around the world manage and optimize enterprise IT spend and derive tangible financial value and operational improvement, IBM added.