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How Nutanix Could Benefit from Its Minjar Acquisition

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Importance of the Minjar acquisition

In March, enterprise cloud service operator Nutanix (NTNX) proposed to acquire Botmetric maker Minjar. The terms of the deal remained undisclosed. Minjar offers clients unified cost control and an operational view of their workloads running on public clouds.

Nutanix believes that the Minjar buyout could help clients better manage their multiple cloud operations. The deal may also grant Nutanix access to Minjar’s technology, which could boost Nutanix’s Xi and Calm products.

Nutanix also entered into a definitive agreement to acquire Netsil, an application discovery and operation management company. The deal could create more opportunities for the company to offer multicloud services to customers, combining application discovery and operation management.

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Strong cash balance helping acquisition goals

Despite having negative free cash flow, Nutanix has continued to acquire companies. The graph above shows Nutanix’s cash position over the last five quarters. In August 2016, the company bought Calm.io, which offers application automation and lifecycle management across cloud platforms, for ~$7.7 million. In September 2016, Nutanix acquired US-based PernixData for $23 million, driving its data acceleration and analytics solutions.

Mergers and acquisitions in the IT (information technology) industry are quite common. In fiscal 2017, Cadence (CDNS) invested ~$143 million in acquisitions.

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