Talend SA missed analysts’ earnings-per-share in its just-reported first quarter, but the stock barely moved because the announcement was purely academic: The data integration services provider agreed to a $2.4 billion buyout offer from private equity firm Thoma Bravo LP in March and expects to exit the public market in the third quarter.
Selling to private equity owners often isn’t the dream scenario for tech companies, as some of those investors are known for carving up and selling off their acquired companies piecemeal. But Talend Chief Executive Christal Bemont (pictured) doesn’t anticipate such a fate under Thoma Bravo.
“I think of this as an opportunity to think about innovation, how we get backing on the strategy we’ve already laid out,” she said in an interview with SiliconANGLE. “It’s additional support from well-established folks who support our strategy.”
If history is any lesson, Talend will get the leash it needs from its new parent. Over the course of more than 40 years and more than 300-plus acquisitions – nearly all of them software companies — Thoma Bravo has built a reputation as a growth-oriented investor that largely leaves existing management in place and provides coaching and cross-fertilization with its other portfolio companies.
Bemont left no doubt that she doesn’t see private equity ownership as an endpoint. “I hope to be right back giving quarterly earnings in the not-too-distant future,” she said.
Finding a balance
Like many midsized companies — its market capitalization is just over $2 billion — Talend has struggled to balance the demands of stakeholders with the need to invest in its products. The company became a Wall Street darling when it was one of the first software companies to go public nearly five years ago following a prolonged period of stagnation in initial public offerings. Its stock price tripled in its first two years but tumbled on weak guidance in late 2018 and again last year when the entire market took a hit in the early days of the COVID-19 pandemic.
Since taking over as CEO early last year, Bemont has focused the business on growing cloud revenue and evangelizing data quality, a strategy she believes allows the company “to deliver product in a unique way that nobody else is solving.”
With cloud annual recurring revenue up 88% and subscription revenue up 14% on a constant-currency basis in the most recent quarter, Talend is clearly turning the corner on cloud, but the data quality initiative is still in the early stages.
Bemont is betting the quality story is in line with the rise of what she called “citizen data scientists,” who attend to much of their own data stewardship without the heavy involvement of the information technology organization.
Citizen data scientists
In the future, being data-driven “won’t be about just IT and DevOps,” she said. “You have to have every person in the organization empowered to consume or produce data on behalf of a company. People need to become athletic with their data.”
Thoma Bravo brings not only financial resources but the resources of its 88 current portfolio companies to bear on helping Talend sharpen its operations and crack open new markets, Bemont said.
“It’s about our ability to accelerate, be more creative, looks at opportunities that fall into their network and not have to balance every single moment in the quarter,” she said. As a public company, “Sometimes you have to think about quarterly results at the expense of the longer term. We can do things we may not have been able to do because in the past it was too risky.”
Bemont’s strategic horizon is three years, after which Talend may again test the public markets. “I don’t see this as a runway to infinity,” she said. “I see it as framing goals in three years that make us highly interesting to shareholders. It’s exciting to think about going public again.”
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