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March 5, 2021

Precisely to Expand M&A After Being Acquired in $3.5 Billion Deal

Alex Woodie

(Hananeko_Studio/Shutterstock)

Precisely, previously known as Syncsort, will be acquired by Clearlake Capital and TA Associates in a deal that values the data integrity company at $3.5 billion, it was announced this week. Precisely says the deal will give it funds necessary to expand its M&A strategy and accelerate growth in the fields of data quality, integration, enrichment, and protection.

Datanami readers whose memories extend back to the previous decade may recall the early work that Syncsort did in connecting IBM mainframes (its historical focus dating back to the company’s founding in 1968) with emerging big data platforms, including Apache Hadoop. For a time, engineers at the Pearl River, New York company were among the top contributors to the open source Hadoop project as it sought to help its customers offload expensive data integration routines from System Z and MVS systems to commodity X86 clusters with its DMX-h software.

The current iteration of the company began to take shape in 2015, when Clearlake acquired Syncsort the first time when the company’s revenue was $75 million. In 2016, Clearlake oversaw the acquisition of Trillium Software, a provider of data quality solutions, and integration into Syncsort’s business. Then a year later, Clearlake sold the majority of its share in Syncsort and another software firm that it owned a controlling stake in, Vision Solutions, to Centerbridge Partners, in a $1.26 billion deal. Centerbridge then combined the two companies into a single entity under the Syncsort banner (Clearlake maintained a minority stake).

In 2019, Syncsort completed its acquisition of the location data and software assets of Pitney Bowes for $600 million, and a few months later, it changed its name to Precisely to reflect the transformation that the company had been through.

That brings us to last week, when Centerbridge reached a deal with Clearlake and TA Associates to acquire a majority stake in the company. In a flip-flop of ownership stakes, Centerbridge retains a minority share of the company, while Clearlake and TA will be calling the shots.

According to Precisely CTO Tendü Yogurtçu, the deal validates the investments that Precisely has made and the growth the company has experienced in the six years since Clearlake sold a majority stake to Centerbridge.

“We see a big opportunity,” she says. “We are in a unique position to lead this market. There aren’t vendors who are addressing all aspects of data integrity with delivering accuracy, delivering completeness, delivering consistency, and context. So this is a unique opportunity for us.”

Fueled by acquisitions, Precisely has grown revenues by a factor of 10 over the past 10 years. The company had $600 million in revenues last year, CEO Josh Rogers said in a story that appeared in the Wall Street Journal, and revenues for this year are expected to be in the $650 million to $700 million range.

COVID-19 helped drive business in some areas in 2020, Yogurtçu says, and looking forward, the overall $2.3 trillion opportunity that digital transformation represents means that the market for data integrity (a catchall that includes Precisely’s offerings in data quality, integration, location, and protection) will continue to grow.

“The opportunity for us is we are seeing many organizations [invest in] digital business transformation, investing in AI applications where the trust in data matters,” Yogurtçu says. “Those digital transformation efforts and modernization efforts and investment in data science and AI really create an opportunity for us.”

Looking forward into 2020, Precisely will be looking to streamline access to its products in the cloud, which has become the center point of many company’s big data, advanced analytics, and AI initiatives. The company is committed to supporting all public clouds, Yogurtçu says.

Terms of the deal were not disclosed. The $3.5-billion valuation was The deal is expected to close in the second quarter of 2021.

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Editor’s note: This article has been corrected. Clearlake did not acquire Syncsort for $75 million in 2015. Syncsort’s annual revenue was $75 million when Clearlake acquired the company the first time in 2015. Datanami regrets the error.

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