 |
| Clermont Meridian Trading Outlines Why AppDynamics Sold to Cisco Two days Before IPO |
Cisco has agreed to buy AppDynamics for $3.7 billion in cash and assumed stock awards two days before the company's scheduled initial public offering. Cisco announced the purchase late Tuesday, and it is anticipated to finalize by the end of April. The sale has been appraised by analysts from the financial planning company Clermont Meridian Trading.
"AppDynamics was supposed to be the first IT company to go public in 2017, with an initial public offering scheduled for January 26. Tech industry insiders and investors have keenly watched the AppDynamics' IPO because of Wall Street investors' treatment of the company which could signal how other businesses would perform later in 2017," Matthew Bird, Institutional Director of Equities at Clermont Meridian Trading stated about the transaction.
The company delivers application performance management services, which include a dashboard that shows how well a company's software is performing. This is critical because businesses rely on computerized systems for a range of essential operations. (On Monday, for example, United Airlines put all of its flights on hold for two hours due to a computer malfunction.)
AppDynamics will continue to function as a separate division under the direction of current CEO David Wadhwani, according to Cisco. Rowan Trollope, Cisco's senior vice president and general manager for IoT and Applications will lead the team.
"The combination of Cisco and AppDynamics will enable us to give end-to-end visibility and analytics from the network to the application, which, when combined with security and scale, will enable IT to create a new level of business results," Trollope said in a statement.
According to AppDynamics' IPO prospectus, the company had around 1,975 customers as of Oct. 31, including over 275 of the Global 2000. Cisco's internet of things (IoT) and applications division will be led by CEO David Wadhwani, who joined in 2015. The deal is anticipated to finalize in the quarter ending in April. AppDynamics was valued at $1.9 billion in its latest round of private fundraising, and its initial public offering was projected to be less than that. Cisco is forking up a hefty premium.