DynaTrace Acquired by Compuware for $256M to Make Business Software Run Better

7/6/11Follow @gthuang

Another Boston-area business software company exits the scene today via acquisition. Following in the footsteps of Gomez (and many others), Waltham, MA-based DynaTrace, which helps companies manage the performance of their software applications, has been bought by Detroit-based Compuware (NASDAQ: CPWR) for $256 million in cash. The deal closed on July 1.

DynaTrace has 180 employees worldwide, and “substantially all of these,” including the management team (led by CEO John Van Siclen), are expected to stay with the merged company, according to the press release. DynaTrace started in 2005 and was VC-backed by Bain Capital Ventures and Bay Partners. The company raised about $22 million in total financing, including $4 million at the beginning of this year. So the acquisition looks like a very strong exit for the investors.

DynaTrace had $26 million in revenues over the past 12 months, the release stated, and is expected to add between $35 million and $45 million to Compuware’s top line in fiscal year 2012.

Compuware counts among its big customers Google, Facebook, Yahoo, Adobe, Amazon.com, the BBC, USA Today, and Subaru (and now DynaTrace customers like Zappos, SAS, and Macy’s, if they weren’t already). The firm was founded in 1973 and went public in 1992. By acquiring companies like Gomez and DynaTrace, Compuware is making a strong move in performance management software and user experience for Web and mobile applications.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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