About the deal
Workday (WDAY) announced on June 11 that it entered into an agreement to buy Adaptive Insights for ~$1.6 billion, which is expected to boost its product portfolio. Adaptive Insights had filed for an IPO on May 17. Around $150.0 million in unvested equity was issued to Adaptive Insights employees, which was included in the acquisition price. The cash transaction is expected to conclude by the end of the third quarter.
A look at the players
Workday (WDAY) delivers a complete suite of enterprise human capital management (or HCM) and financial management solutions through its cloud application. Adaptive Insights offers cloud platforms for business planning to its customers. So, this deal is expected to help Workday enhance its back-office product offerings through the cloud.
From the chart above, we can see Workday’s investment made in the acquisition in the last four years. The Adaptive Insights deal can be its largest acquisition during this period. The company’s improving free cash flow results allowed the company to make such a sizable acquisition.