Alteryx Set to Acquired for $4.4B by Private Equity Firms Clearlake and Insight Partners

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Alteryx, one of the prominent players in the data analytics sector, is set to be acquired by private equity firms Clearlake Capital Group and Insight Partners for $4.4B. Under the terms of the acquisition, Alteryx stockholders will receive $48.25 per share in cash for each of Alteryx Class A or Class B common stock they own. 

The offer price represented a 29.1% premium over Alteryx’s latest closing share price. Alteryx has been greatly expanding its AI-powered offers in a bid to tap into the growing demand for data analytics solutions. According to Research and Markets, one of the world’s largest market research firms, the big data analytics market could be worth over $105B by 2027. 

The acquisition deal is set to mark a significant shift in the data analytics landscape. However, the move does not come as a surprise. Alteryx announced in September that they are exploring a sale to potential acquirers. This was a result of slow revenue growth in recent quarters. The slowing growth had cast doubts on the company’s ability to capitalize on its long-term growth catalysts. 

The highly competitive market dynamics and challenges in expanding its customer base led to the suppressed valuation, making Alteryx a valuable target for acquisition. The Alteryx stock which had peaked at over $178 per share in July 2020, fell dramatically to below $30 per share by August 2023. 

Alteryx has faced stiff competition from traditional analytics players Tableau and Qlik, and from tech giants, Amazon and Google, who continue to expand their data modeling platforms. 

Symphony, a private equity firm focused on innovative software, data, and analytics market, was also in the race to acquire Alteryx, but lost to Clearlake and Insight Partners. After completion of the deal, Alteryx will become a privately held company. 

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With the revenue growth down, the acquisition would most likely be beneficial, as it will provide much-needed financial backing for increased working capital. It also offers more flexibility to Alteryx as a private company. Another potential benefit could be that Alteryx can continue advancing its transition to cloud, which has been a major focus of the company recently.

“In addition to delivering significant and certain cash value to our stockholders, this transaction will provide increased working capital and industry expertise and flexibility as a private company. Together, we will make investments that matter most to our customers and accelerate our mission of harnessing the power of analytics to enable customers all over the world to transform data into a breakthrough,” said Mark Anderson, CEO of Alteryx. 

Deven Parekh and Ryan Hinkle, each a Managing Director at Insight Partners, said that the next phase of Alteryx’s growth journey will be” focused on cloud and AI/ML to create winning products.” 

While there are several reasons for Alteryx customers and its new owners to be optimistic. However, for sustained growth, the new parent companies must invest in the company and not cut too much staff – which is something private equity firms are reputed to do.  

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