(In-depth and Insightful)
The Wall Street Journal is reporting today that Dell is close to announcing the sale of its Chesterbrook-based Boomi unit to private equity firms Francisco Partners and TPG. (Now Bloomberg reports its a done deal).
It says the transaction, which might be announced later tonight, could be valued at $4 billion including debt.
Francisco Partners and Elliot Management Group reportedly offered to buy Boomi as part of the Dell Software Group in 2016, but Dell wasn’t ready to sell.
Michael Dell was personally involved in Dell’s acquisition of Boomi in 2010, when revenue was still relatively small, and championed the company as it grew. But Dell is still chopping away at debt, and Boomi is probably not strategic to what Dell is today.
Rick Nucci was the founder, and Bob Moul later joined as GM. They departed some time after Dell’s acquisition, and Chris McNabb became CEO.
To be determined eventually is wheher Boomi will remain committed to the Philly area. As of now, Chesterbrook is its official headquarters, but headcount is split between there and San Francisco.
Salesforce bought iPaaS competitor MuleSoft for $6.5 billion in 2018.
Contacted by email for comment, R “Ray” Wang, Founder, Chairman, & Principal Analyst of Constellation Research, responded referring to both the Boomi sale and the proposed spinoff of Dell’s 81% stake in VMware:
- “yep. expected. Dell makes out. he engineered the most interesting bail out in history.
- He took his company back from Silverlake, doubled down in software and found his financial freedom.”
Boomi had only 30 employees when Dell bought it in 2010, writes @PhillyJoeD in the Inquirer. It was just a tiny outfit. I used to read about it in some blog which seemed like the only source to cover it at the time.
Dell Boomi now has over 1000 employees, almost half at its Chesterbrook HQ and its small Philly satellite office. That likely translates into revenue of more than $200 million.
Michael Dell demonstrated great insight and persistence from the start in grasping the potential of Rick Nucci’s creation and giving it plenty of runway to grow within Dell. Most huge companies crush small acquisitions, quite frankly. But Boomi has continued to prosper under Chris McNabb’s leadership. The Cloud has been key to its growth, be it linking one cloud app to another or (importantly for Boomi) cloud to legacy app.
Boomi made its second and largest acquisition, Unifi Software, last week. The Bay Area company has 78 employees. Terms weren’t disclosed. Or as Peter Key, formerly of the Business Journal, once noted, “they never are.”
Unifi specializes in discovering, cataloging and prepping a company’s data, typically the kind that is unstructured and previously not interpreted by its systems. Unify says this is often two thirds of a company’s data resources. The transformation of this data usually depends on AI.
The IPaaS (Platform as a Service) market, which is led by Dell Boomi and MuleSoft (acquired in 2018 by Salesforce for $6.5 billion) is still in a hypergrowth stage. The market is incorporating a broader range of related skills and tools into its space. At least 10 other companies are coming at Boomi and Mulesoft from different angles. Boomi is trying to lead the industry in defining the future shape of the market.
The next question may be is there a larger acquisition that Boomi should consider to further strengthen its market position?