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Why Apptio Stock Soared on Monday

By Daniel Sparks – Updated Nov 12, 2018 at 11:18AM

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This acquisition news makes for a good day for Apptio shareholders.

What happened

Shares of Apptio (NASDAQ: APTI), provider of cloud-based technology business management solutions, soared on Monday, rising nearly 52% as of 3:06 p.m. EST.

The stock's rise follows news on Sunday that Apptio had entered into a definitive agreement to be acquired by investment firm Vista Equity Partners.

A chart showing a stock price rising

Image source: Getty Images.

So what

Explaining the stock's big jump was the news that Vista has agreed to acquire all outstanding shares of Apptio in a deal valued at $1.94 billion, translating to $38 in cash per share. This represents a 53% premium to where Apptio stock was trading as of market close on Nov. 9. 

"Vista's investment and deep expertise in growing world-class SaaS businesses and the flexibility we will have as a private company will help us accelerate our growth while helping us maintain our commitment to creating wildly successful customers," said Apptio CEO Sunny Gupta in a press release about the deal.

Now what

Though Apptio's board of directors unanimously approved this deal, shareholders will still need to vote -- and the deal is subject to regulatory customary closing conditions. In the meantime, part of the deal's arrangement includes a 30-day "go-shop" period that will allow Apptio to solicit alternative acquisition offers.

Given the significant premium Vista is paying for Apptio, shareholders are likely to vote to approve the deal.

The acquisition is expected to close in the first quarter of 2019.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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