Alteryx to be acquired by private equity firms for $4.4 billion

Alteryx has entered into an agreement to be acquired by private equity firms Clearlake Capital Group and Insight Partners for $4.4 billion. Upon closing, Alteryx stockholders will receive $48.25 per share. The closing is expected to occur during the first half of 2024, subject to customary closing conditions and approvals.

After the acquisition is finalized, Alteryx, a data management and analytics vendor that went public in 2017, will transition to a privately held company.

Due to slow growth in recent quarters, the acquisition didn’t come as a surprise, according to Doug Henschen, an analyst at Constellation Research. Revenue growth decreased to 26% in the first quarter of 2023, falling below 8% in the third quarter.

With its stock price plummeting from a peak of over $178 per share in 2020 to below $30 per share in 2023, Alteryx was facing difficulties before the acquisition.

I’m not at all surprised [by the acquisition]. The company had announced it was exploring a sale after a few quarters of poor results.

“I’m not at all surprised [by the acquisition],” Henschen said. “The company had announced it was exploring a sale after a few quarters of poor results.”

Alteryx is still transitioning from on-premises tools to cloud-native tools, a trend noticed by private equity firms who have been acquiring companies during this shift. This pattern was observed with data management and analytics companies like Informatica, Qlik, Cloudera, and Tibco.

A slow move to cloud

Alteryx, along with vendors such as Informatica and SAP, is among the well-known independent data preparation vendors. Alteryx’s data modeling tools initially targeted data engineers and scientists, but as self-service analytics gained traction, Alteryx prioritized ease of use and introduced low-code/no-code features and tools to streamline data modeling.

Alteryx was slow to introduce cloud-based capabilities, finally making its full cloud-native platform generally available in February 2023. This transition was coupled with significant executive changes within the company, which subsequently led to an emphasis on cloud-native capabilities.

Unlike its lag in transitioning to the cloud, Alteryx was among the first data management vendors to introduce generative AI capabilities, known as Aidin, in May 2023. However, the company’s slow embrace of the cloud, along with executive turnover, contributed to its recent struggles, with increased competition from traditional analytics vendors and tech giants.

Alteryx’s acquisition benefits

Alteryx’s acquisition was not only expected but also likely beneficial, according to Henschen. The move provides financial flexibility and time for reorganization that Alteryx needed. Similarly, going private will allow the company to advance its cloud-native capabilities without the scrutiny of being publicly traded.

Outlook

The acquisition has the potential to benefit not only Alteryx but also its customers. Clearlake Capital Group and Insight Partners are expected to support Alteryx’s continued advancement, which will ultimately be positive for customers.

Private equity ownership would ease concerns about the company’s future, although short-term concerns about layoffs and continued investment in research and development remain. Customers are expected to be relieved with the company’s new financial backing, provided that the new owners continue investing in the company.

Eric Avidon is a senior news writer for TechTarget Editorial and a journalist with more than 25 years of experience. He covers analytics and data management.