- GeneralM&A
- September 29, 2021
- 6 minutes read
Deal: PE Firm Vista Buys UK Software Firm Blue Prism For $1.5B
Vista, an American private equity firm, has sealed its latest buyout deal for a company based in the UK. It’s…
Vista, an American private equity firm, has sealed its latest buyout deal for a company based in the UK. It’s agreed to buy Blue Prism, a firm that makes Robotic Process Automation (RPA) software, for £1.1bn ($1.5bn).
- Under deal terms, Vista will pay £11.25 in cash per share of Blue Prism, which is listed on the London Stock Exchange (LON: PRSM). Once completed, the company will be taken off the public markets into Vista’s hands.
- The $1.5bn deal value represents a 35% premium to Blue Prism’s market cap just before it was announced.
Notably, Vista says it plans to merge Blue Prism with one of its portfolio companies, Tibco Software, once it acquires it. The private equity firm bought Tibco for $4.3bn in 2014. As it shows, Vista wants to consolidate both companies into one bigger firm that it hopes to exit for a higher value than they were purchased in future time.
- Merging companies with similar businesses is not new for Vista as the firm has done that in the past with some of its portfolio companies having similar products. In this case, both Blue Prism and Tibco provides software used by enterprises to co-ordinate business activities.
- Blue Prism provides software for what’s called robotic process automation (RPA). It refers to automation software that enterprises employ to perform repetitive tasks, e.g. payroll processing and customer support.
- Blue Prism was founded two decades ago and went public in 2016 with a market capitalization of just £49mn. Forward to five years later, the company is getting sold for £1.1bn, 22x its debut market cap. During those years, Blue Prism’s annual sales rose from £9.6mn in 2016 to £141mn in 2020, great growth.
In recent years, the RPA software market has been growing red hot, driven by top vendors like Blue Prism, Automation Anywhere, and UiPath. Among those three, Blue Prism is the 3rd biggest, Automation Anywhere the 2nd, and UiPath the 1st, according to Gartner rankings.
Given the hot RPA market, it’s no surprise that Vista has sought to capitalize on it relatively early by acquiring Blue Prism. The tech-focused PE firm manages $81bn in assets, making Blue Prism a small part to add to its total portfolio.
