Vista Equity Partners extends its conquest to acquire burgeoning software companies by signing a definitive agreement to purchase Mindbody. Should MINDBODY Inc (NASDAQ:MB) board approve the transaction, Vista Equity Partners will pay Mindbody’s shareholders $36.50 per share totaling to approximately $1.90 billion.
The acquisition is happening barely three years after Mindbody going public. Mindbody has been focused on developing its business management software targeting fitness centers, luxury spas and beauty salons. As of 207, the company reported a tidy revenue of $182.6 million.
Mindbody’s Solid Financials
On November 6 the company posted solid third-quarter earnings. Mindbody generated revenue of $63.99 million during the quarter coming in slightly below analysts’ consensus projection of $63.99 million.
The company managed a $0.05 Earnings Per Share topping analysts’ estimate of $0.07. Mindbody posted a 36.9% increase in revenue compared to last year’s earnings for the same quarter.
Vista agreed to pay $36.50 for the company’s existing and outstanding shares that were trading at about $21.72 representing a 68% premium. As of this writing, the company’s shares had dropped about $0.05 of its new value closing the December 28 business day at $36.45.
During the Friday’s once traded at a high of $36.50 and a low of 36.08 scoring a market valuation of $1.74 billion.
The company, however, has an average analysts’ recommendation of HOLD with an ambitious price target of $35.20.
The agreement provided for a 30-day window for Mindbody’s management to review available offers after before the deal is finalized- probably in the first quarter of 2019. Mindbody contracted Qatalyst Partners as the chief financial advisor for the deal while Kirkland & Ellis LLP advised Vista.
As mentioned earlier, Vista Equity Partners has an eye on software companies. About a month earlier, the company signed another definitive agreement to acquire Apptio, Inc for a whopping $1.94 billion. Just like the Mindbody deal, Vista agreed to acquire Apptio for a higher premium this time 53%. According to the terms of the agreement, Vista will pay Apptio’s shareholders $38.00 in cash.
Speaking about the Apptio acquisition deal, Sunny Gupta, Co-Founder, and CEO of Apptio said that ,“Since founding, our focus has been on building the next great cloud software platform by dedicating ourselves to helping companies of all sizes and industries manage, plan, and optimize technology investments across their hybrid IT environments.”
The CEO confirmed that Apptio would continue undertaking its core functions of product innovation and geographical expansion even after the acquisition. Apptio’s deal was unanimously approved by the company’s Board of Directors and even urging the stockholders with voting rights to vote their shares in favor of the acquisition.
The company’s headquarters will remain the same- Bellevue, and it will continue to operate its regional offices across the U.S, UMEA, and APAC. The board was given the 30-day “go-shop” window to consider alternative offers after which the transaction will be completed in the first quarter of 2019 as well.
Apptio Inc (NASDAQ:APTI) stock is faring well also. The stock closed at $37.97 during Friday’s business session giving the company a market valuation of $1.73 billion. It is just a matter of time before Vista’s high-value investment pays off. The company has a trend of investing in progressive companies, raising their value hoping to reap big in the long term.