Informatica goes private after $5.3B buyout

CPP and U.S. equity fund buy California maker of data-management tools

Canada Pension Plan Investment Board (CPPIB) and U.S. partner Permira have a friendly deal to buy Informatica Corp. for about $5.3 billion (U.S.), the largest leveraged buyout this year.

California-based Informatica has about 5,500 employees who serve organizations that want to manage large-scale information assets. CPPIB’s head of private investments said Informatica provides the Canadian pension fund with an opportunity to tap into a stable base of revenue with potential for future growth.

“We look forward to partnering with the Informatica team and the Permira funds to accelerate the company’s growth,” said CPPIB senior managing director Mark Jenkins. He said CPPIB will have a significant interest in Informatica, adding that the amount of each partner’s investment wasn’t being disclosed.

Canada Pension Plan Investment Board invests funds that aren’t currently needed to pay retirement benefits to members of the Canada Pension Plan. As of Dec. 31, it had $238.8 billion of assets under management.

Under the deal announced Tuesday, shareholders of the data and software company will receive $48.75 in cash per share, marking a 10-per-cent premium to Monday’s closing price of $44.22. The deal will take the company private and it is expected to be completed in either the second or third quarter.

Informatica makes tools to help companies link together and manage large amounts of data, according to Bloomberg. Like other traditional enterprise technology companies, it has been forced to change its products to respond to businesses storing more data in computers operated by third parties, and purchasing software via subscriptions rather than upfront licence fees. Private equity firms have embraced enterprise software, attracted by strong recurring revenue once businesses install the technologies that connect new products to existing systems.