Is Acumatica a Public Company?
The title of this Discussion Topic is for people who might be searching for "is acumatica a public company" on Google in the future.
First, to answer the question of "is Acumatica a public company?" as of December 17th, 2020, the answer is "no".
Acumatica is currently a privately-help company under EQT ownership. EQT Partners acquired Acumatica in June 2019. EQT Partners is headquartered in Stockholm, Sweden.
Prior to being acquired by EQT Partners, I think Acumatica was primarily owned by John Howell, Mike Chtchelkonogov, and Serguei Beloussov, the three people who founded Acumatica in 2008. I say "I think" because Acumatica OEM partner Visma invested in Acumatica in September 2011 (click here) and Acumatica EOM partner MYOB invested in Acumatica in October 2014 (click here). I assume that the 3 founders retained a majority ownership until Acumatica was acquired by EQT in June 2019, but I'm not 100% sure.
Well, first, it's significant to note the relationship between Acumatica and another company in the EQT portfolio called IFS. They refer to IFS and Acumatica as "sister companies". IFS is for large companies while Acumatica is for medium-sized companies. What is "large" and "medium"? It's defined by annual revenue. I've heard a few different "lines drawn in the sand" between Acumatica and IFS: $500 million in annual revenue, $300 million in annual revenue, and $200 million in annual revenue. Jon Roskill said $250 million in July 2019 (click here). I think we can say that companies doing between around $10 million in annual revenue and a few hundred million in annual revenue are in Acumatica territory.
Acumatica and IFS are increasingly "joined at the hip", so to speak, because they are sharing resources. They are sharing office space in London (and I think in Myanmar). IFS CEO Darren Roos liked the Acumatica Partner Portal so Acumatica CEO Jon Roskill "gave it to him". I don't know details, but it would make sense that Acumatica and IFS are sharing marketing and event planning resources (both companies like to host events in Boston). Perhaps the latest concrete "sister company" example is the new Acumatica Community Forums. Go to the Acumatica Community (click here) and also the IFS Community (click here), then scroll to the bottom. You will see this logo because both sites are powered by inSided.com (click here):
Hipster software companies like to talk about "making the world a better place" and they like to create an environment where there employees do nothing but work (think Apple and Facebook campuses). But behind that cool hippie image is something very tangible: MONEY. Acumatica and IFS don't just appear to be "sister companies" from a talking point standpoint. Since they are sharing resources, there has to be an impact on their Balance Sheets.
Why does this matter? Because you have to wonder at what point "sister companies" turns into "inseparable". If they become "inseparable", then an IFS IPO (public offering) would also mean an Acumatica IPO.
Search for "$1 billion", "$720 million", and "$40 million" in my Acumatica June 2019 Acquisition article (click here) and you'll see that IFS CEO Darren Roos is targeting $1 billion in annual revenue. No surprise there because $1 billion in annual revenue is the definition of a "unicorn", the dream of every software company. But, when I read those press releases, it seems like Darren is adding the IFS annual revenue of $720 million together with the Acumatica annual revenue of $40 million to say that he thinks they will reach $1 billion together. Does that mean a join IFS / Acumatica IPO? Also search my article for "going to have money" to see Jon Roskill's comments about having personal money in both Acumatica and IFS. Following the money, a join Acumatica / IFS IPO sure makes sense.
Then consider the timing where IFS CEO Darren Roos says in this article (click here) that IFS will IPO in 2020 or 2021. Will this include "sister company" Acumatica?
Hopefully now you can see why I think it's a strong possibility that Acumatica becomes a public company.
To throw some "cold water" on this, there is this article from July 2020 (click here) where IFS was moved from the EQT VII fund to the EQT VIII and EQT IX funds. When Acumatica was acquired by EQT, it was by the EQT VII fund, the same fund that held IFS at the time. Now that IFS is held by different funds, does that impact their "sister company" status and put distance between IFS and Acumatica? Is this just a financial shell game or does it mean that EQT is lining up IFS to IPO without Acumatica? Time will tell.
Coming back to today, December 17th, 2020, why am I starting this post?
Because of this article about EQT acquiring a company called Storable (click here), another big EQT acquisition. That article mentions EQT ownership of an open source software provider called SUSE. What's interesting is the comments about SUSE going public in the near future which was news to me. Doing a quick Google search, which EQT fund owns SUSE? The EQT VIII fund owns SUSE according to this article (click here). EQT VIII is the same fund that now owns IFS. Does that mean EQT VIII is the fund that takes companies public?
It will be interesting to see in 2021 if IFS goes public with or without Acumatica. If IFS does go public and without Acumatica, maybe the news to watch for is whether Acumatica gets sold to the EQT VIII fund.
We can update this Discussion Topic with additional news about the possibility of Acumatica becoming a public company as it becomes available.
Doesn’t $55(ish) million in annual revenue fall short of the typical $100+ million most companies need to reach in order to IPO?
Take a look at a competitor like Intacct I was reading for 3-4 years that their IPO was right around the corner. Ultimately instead of an IPO they were acquired by Sage for $850 million and at the time were reportedly generating $67 million annually.
Private equity doesn’t exist to run companies. They package them to eventually flip them. This flip might be to a public company or an ipo or a lateral move to a new private equity company.
IPO is a blessing and a curse. They gain access to more funds to reinvest. We gain access to audited public financials.
To get there they hop on the treadmill of keeping shareholders and analysts happy. This has been the downfall of more than a few IPO companies in this space.
My guess is that Acumatica is acquired by a public company looking to fill a spot in their lineup. Intuit, Sage, or one of a myriad of industry specific companies ( shipping, warehousing , etc ) who may not have the core financials but have the cash.
Some of the original reporting such as:
For example, he said, Acumatica executives will roll over a portion of their proceeds from the acquisition into IFS.
Might be just a fancy way of saying they took equity instead of cash as part of the sale
Another high profile hire for Acumatica.
Sanket Akerkar has become the Chief Revenue Officer.