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Anaplan to go private after $10.7B acquisition

Cloud-based integrated business planning vendor Anaplan will be acquired by Thoma Bravo for $10.7 billion, positioning it to be more competitive with IBP rivals SAP and Oracle.

Anaplan is being acquired by private equity firm Thoma Bravo for $10.7 billion.

The deal for the San Francisco-based cloud integrated business planning (IBP) vendor is expected to close in the first half of 2022. The company currently trades on the New York Stock Exchange, and Thoma Bravo plans to take Anaplan private after the acquisition closes, according to the company.

But the long-term fate of the company is still in question, according to one analyst. While Anaplan offers a competitive IBP product, the acquisition may result in cost cutting intended to shore up profitability and make the vendor more attractive to be resold.

Anaplan reported revenue of $447.8 million in the fiscal year ending Jan. 31, 2021. It has 2,200 employees and claims to have 1,900 customers and 175 partners worldwide.

"Anaplan is a clear leader in connected planning, solving critical business priorities for the world's largest enterprises as they implement strategic and complex digital transformations," Holden Spaht, a managing partner at Thoma Bravo, said in a statement announcing the deal.

Thoma Bravo will use its "extensive operational and investment expertise in enterprise software to support Anaplan in its future growth," Spaht said in the statement.

Anaplan is a pioneer in cloud-based IBP or connected planning software, a combination of supply chain optimization, financial planning and analysis and sales and operations planning (S&OP). This can provide companies with better tools for planning across business units, leading to benefits such as more visibility into supply chains and improved financial analysis.

The IBP software market includes large enterprise vendors like SAP, Oracle and Infor, which add capabilities to their ERP platforms, as well as other cloud-first IBP platforms, including those from Blue Yonder, Coupa, E2open and Kinaxis.

Investment will help solidify competitiveness

The high valuation for the Anaplan acquisition was a "shock," but the new investment should position the company well in the planning software market, according to Predrag Jakovljevic, principal industry analyst at Technology Evaluation Centers.

"Anaplan is [Oracle] Hyperion done the right way -- in the cloud and in-memory from scratch," Jakovljevic said. "Their advantage is the ability to add new tables and areas to plan in an enterprise and entire supply chain."

In addition to the traditional financial capabilities that ERP rivals like Oracle and SAP have, Anaplan also includes features for financial supply chain planning, S&OP, workforce planning, territory and commissions planning and retail merchandise planning, he said. This enables the company to also compete with advanced supply chain and S&OP vendors like Blue Yonder and Kinaxis.

"[My] guess [is] Thoma Bravo will invest in R&D for more industry solutions and in more international offices," Jakovljevic said.

However, while Anaplan has experienced considerable growth, it has never been profitable, he continued.

"Their sales and marketing costs run around 60% of revenue, which is a massive cost," Jakovljevic said. "In essence, they have been buying their way into market share."

Thoma Bravo is likely going to cut costs to increase profitability, thereby positioning Anaplan to be sold again, he said.

Jim O'Donnell is a TechTarget news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.

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