Data Analytics Software Firm Alteryx In Privatization Talks Amid Intense Competition, Valuation Challenges

A private equity consortium comprising Insight Partners and Clearlake Capital Group is currently engaged in advanced negotiations to take the data analytics software company Alteryx Inc AYX private for roughly $5 billion, including debt, Reuters reports. 

This move follows Alteryx facing intense competition from tech giants like Microsoft Corp MSFT and Oracle Corp ORCL, coupled with challenges in securing new business, resulting in a depreciation of its valuation and positioning it as an acquisition target.

Citing the sources, Reuters highlighted that Insight and Clearlake are discussing a cash offer of over $50 per share for Alteryx. 

This potential deal would present a premium exceeding 65% based on Alteryx's share price on September 5, marking the last trading day before reports surfaced about Alteryx exploring a sale. 

Despite the progress, there remains the possibility of competition from Symphony Technology Group, another private equity entity, making a bid for Alteryx, according to Reuters.

The potential acquisition leaves uncertainties regarding the role of Alteryx's Co-founder and Executive Chair, Dean Stoecker, who possesses an 11.5% stake in the company. 

However, he controls the company through dual-class shares, granting him 51% of all outstanding shares' voting power, raising questions about his involvement or stake in the deal, the report said.

The company has transitioned to a subscription-focused business model, aligning with the increasing demand for data analytics services in recent years. Notably, Insight Partners, an early investor in Alteryx, maintains a 1.5% stake in the company and has a representation on its board of directors.

Price Action: AYX shares are up 1.63% at $48.60 during the premarket session on the last check Friday.