Daily Management Review

How AppDynamics was Swooped Upon and Nabbed at the Last Minute


01/26/2017




How AppDynamics was Swooped Upon and Nabbed at the Last Minute
Top leaders of the software company AppDynamics  were back home in California for final visits with prospective shareholders even as the AppDynamics IPO roadshow hit its home stretch this week.
 
Pitching their story to about 100 investors was AppDynamics CEO David Wadhwani and CFO Randy Gottfried at a meeting at the Loews Regency Hotel in downtown San Francisco on Monday. Sources from the company said that after that the executives of the recently bought company hopped on a flight to Los Angeles for morning investor meetings the following day.
 
At the same time, getting ready to head to New York for the software developer's debut on the Nasdaq Stock Market, slated for Thursday were about 40 employees, including founder Jyoti Bansal and some board members.
 
The sources said that as AppDynamics raised the price range for the IPO on Tuesday and the deal was oversubscribed, investors were expressing enthusiasm.
 
However very few knew that at that very same time, busy in frantic negotiations on a sale to Ciso, an AppDynamics customer and technology partner, were the company's board members.
 
According to a blog post from Asheem Chandna, an AppDynamics board member and partner at venture firm Greylock Partners, Cisco CEO Chuck Robbins had quietly invited Wadwhani to his house to propose an acquisition in an effort to beat the clock. According to sources, the two companies came to a handshake agreement on Saturday after Cisco lobbed in an acquisition bid.
 
To allow Cisco just enough time to finalize an offer before the share sale, the companies agreed to a 72-hour negotiating period as it wasn't definitive enough to keep AppDynamics from going forward with the IPO.
 
And then on Tuesday afternoon, Cisco announced that they are buying AppDynamics for $3.7 billion after multiple bids.
 
"Cisco has been a customer of AppDynamics for a number of years," said Rob Salvagno, head of corporate development at Cisco, in a conference call on Wednesday. As a client and partner, "that just helped bring us closer and ultimately give us the confidence to move towards making this deal happen," he said.
 
One of the sources said that to jointly address the staff, Cisco's Robbins and Rowan Trollope, a senior vice president greeted Wadhwani and Gottfried when they returned to the AppDynamics office in San Francisco late Tuesday.
 
As the lead underwriters preparing for the offering, Morgan Stanley and Goldman Sachs were plugging along until shortly before the announcement. And closely following the first venture-backed tech IPO in three months were Silicon Valley venture capitalists and entrepreneurs.
 
AppDynamics hired Qatalyst Group, the investment advisory run by Frank Quattrone, to handle negotiations with Cisco. Under the leadership of Salvagno and Chief Strategy Officer Hilton Romanski, Cisco was running its side of the process from San Francisco and Silicon Valley. Cisco utilizing its internal corporate development group and tends to avoid outside bankers for mergers and acquisitions.
 
Due to AppDynamics’ expanding customer base, rapid revenue growth and general belief that it could thrive on its own, company insiders said the sale was described as "bittersweet", sources have said. It also meant that it would not launch the IPO.
 
But the in investors have little to complain as they are exiting at about twice the valuation that the IPO would've likely established at a purchase price of $3.7 billion in cash.
 
(Source:www.cnbc.com)






Science & Technology

With China Set To Dominate, 1 Billion Could Be Using 5G By 2023

Deutsche Telekom unveils next gen 5G mobile antennas in Europe

Diamonds are now the new gold

Expert Body Says Driving In A Driverless Car In An Inebriated Condition Or On Drugs Should Be Legalized

SEC’s EDGAR database vulnerable to cyber threats

Research Says The Risk Of Severe Turbulence On Planes Will Increase Due To Climate Change

Barclays and CLS Group aim to replace SWIFT with blockchain

Designing Of Cars Being Done With Hologram Goggles At Ford

The Already Surging Cyber Attacks Are Set To Rise Even Further, Says A Study

Chinese to equip smartphones with OLED displays

World Politics

World & Politics

Scholar Says Political Appointees Not As Important As Financial Ones In China For The Economy

An Expected Change In Brussels Could Be Crucial For The Euro Zone

Destroying People Who Wouldn't Help One Of His Bankrupt Businesses Was All Trump Talked About When He Met Him In 1990s: Branson

Russia Is Worried About America’s Unpredictability

No oil contracts with Iraqi Kurdistan: Iraq’s oil ministry

Donald Trump lost $ 600 million during his presidency

Britain puts its weight behind Europe in the battle between Boeing and Bombardier

EU hopes to keep the Iran nuclear deal afloat