Vista Equity & Aquia: What this Acquisition Means for the Next Unicorn

top software developer
Zach Ettelman
Sep 27, 2019

Have you heard? Vista Equity Partners acquired a majority ownership stake in Acquia for $1 billion.

The internet is buzzing with news of this major acquisition. And when private equity is involved, things can get hairy. 

Having worked with Vista, Acquia and Mautic, their recently acquired marketing automation platform, we do, in fact, have an option on this shakeup. I’ve been intimately involved with each of the aforementioned companies both separately and together. The following outlines my opinion on how these tech giants will affect the market. 

What does this mean for the DX software industry? 

As large technology conglomerates acquire tech companies and either sell them off or absorb the technology into their brand, we are nearing horizontal integration among the marketing tech stack universe. Companies are touting integrated systems, which helps marketers orchestrate journeys across multiple channels and manage the complete customer lifecycle through the website (CMS), marketing automation, social media, and CRM. 

A flurry of acquisitions in the tech space have proven the need for an integrated DX platform: 

  • Adobe’s $4 billion acquisition of Marketo (sold by Vista Equity Partners)
  • Insight Venture Partners acquires Episerver for $1.16 billion
  • EQT acquires Sitecore for $1.14 billion
  • Salesforce Ventures invests $300 million in Automattic (the company behind WordPress), at a $3 billion valuation
  • Vista Equity acquires majority stake in Acquia for $1 billion

What is the message to the DX buyers (the marketers, the CMO, martech engineers)?

With Adobe gobbling up Marketo and EQT acquiring Sitecore, the largest enterprise-level rival left was Drupal/Acquia. The Drupal/Acquia story is interesting because Drupal is an open-source CMS with thousands of contributors across the world. Drupal has significantly less developer support from its largest open-source rival, WordPress, but that all changes with a tall Belgian fellow named Dries Buytaert. Dries, the founder of Drupal, co-creating Acquia, an enterprise cloud services and digital experience platform company designed specifically for Drupal websites.

In the past few years, Acquia has closed in on its larger proprietary foes, Sitecore and Adobe who support infrastructure for various Fortune 500 companies, nonprofits, and U.S. government organizations. As Acquia becomes more established, we’ve seen them make various acquisitions to provide a more integrated digital experience orchestration platform that competes with their proprietary friends. 

Acquia began its personalization play with Lift a few years back and recently boosted its digital experience play even more by acquiring Mautic, an open-source marketing automation platform. Together with Mautic and its most recent acquisition, Cohesion, Acquia is moving to a DX tech stack that includes a drag-and-drop friendly/componentized content management experience, marketing automation, digital asset management, server storage/cloud services, cross-channel personalization and journey orchestration, and eCommerce. Phew!

What is next for Acquia?

Enter Vista Equity Partners. Vista uses a rigorous and scientific methodology when assessing what companies to invest in. They typically stay in technology industries where they have existing investments and often merge two acquisitions to form new companies. In the past few years, Vista’s consulting arm has helped dozens of Vista companies get on Drupal for their digital experience management, with most of the companies electing to go with Acquia for their managed hosting services and other digital offerings. With the Drupal and Acquia momentum, Vista had a firsthand look at Acquia and where the booming tech company stood among the congested DX competitive landscape. 

Vista’s investment in open-source software and and the largest contributor to the Drupal project means that the investment team sees an opportunity to boost Acquia’s valuation. If the tried-and-true Vista recipe is in play again with Acquia, they’ll start by improving operational efficiencies and making more acquisitions. Then, move into sales and marketing efforts, which all lead to increased earnings of a 10x multiplier. 

Ultimately, this acquisition makes sense for Vista. They have the opportunity to make an incredible amount of money on their $1 billion investment in Acquia. Acquia’s current CEO, Mike Sullivan, was brought in to take the company public, and this move by Vista supports Sullivan’s efforts to increase the company’s valuation in the next 3-5 years.

What does this mean for tech buyers looking to optimize their DX tech stack? 

Horizontal integration and acquisitions from the largest players are not going away anytime soon, and we’ll probably see more in the upcoming years. The tech giants want to create digital ecosystems where users have a 360-degree view of prospects and customers, all managed across a suite of tools that integrate seamlessly. The goal is to create a singular view of prospect and customer journey data. Hopefully, this leads to a more cohesive and seamless experience for end customers across all channels and on all the devices. Time will only tell which powerhouse can create the best system and build on it for years to come.

For DX buyers, this horizontal integration is a move towards better engagement with prospects and customers, but in the meantime, we’ll still see an internal battle between going best-in-breed with the tech stack, or by going all-in on an all-in-one digital experience ecosystem.

Interested in tech industry news? View Mike Gellman’s latest article about smart software.