SciQuest Set to go Private in $509M Deal with Accel-KKR

Software firm SciQuest is set to go private again in a cash deal that values the company at about $509 million.

Private equity firm Accel-KKR is paying $17.75 per share to acquire all of the common stock of Morrisville, NC-based SciQuest (NASDAQ: SQI). The offer represents a 33.7 percent premium over Friday’s closing stock price. SciQuest’s stock price shot up more than 32 percent after the deal was announced this morning. SciQuest said its board of directors has unanimously approved the acquisition, and the companies expect to close the deal by the end of September.

SciQuest provides cloud-based software that helps businesses, educational institutions, and government bodies analyze and manage their spending and supply chains. Accel-KKR invests in technology companies and said it has $4 billion in capital commitments. The private equity firm, which has offices in Menlo Park, CA, Atlanta, and London, purchased a stake in SciQuest in 2014. Accel-KKR said it currently owns 4.9 percent of SciQuest’s outstanding shares.

Accel-KKR’s portfolio includes a number of companies that have some overlap with SciQuest’s offerings. The private equity firm’s financial technology holdings include Paymentus, a Charlotte, NC-based company whose software enables electronic payment and billing; and Austin, TX, companies Abila and Banker’s Toolbox. Abila’s software helps nonprofits and governmental organization manage their finances; Banker’s Toolbox provides software that helps financial institutions prevent and detect fraud. In supply chain management, the Accel-KKR portfolio includes IntegriChain, a Philadelphia-based company whose software helps life science companies manage vendors, distributors, and inventory.

The merger agreement filed with securities regulators includes a “go-shop period,” during which SciQuest has the right to seek out other offers. This right expires June 24. If someone else makes a better offer, SciQuest can continue discussions with that party through July 9, according to the agreement. If SciQuest chooses a better offer, it must pay Accel-KKR a $9.6 million termination fee.

SciQuest was founded in 1995 as an e-commerce company for scientific equipment and raised $37.5 million in venture capital before going public in 1999. After the tech bubble burst, SciQuest was taken private in 2004, in a deal with Menlo Park-based Trinity Ventures. SciQuest revamped its business, focusing on software to manage supply chains. The company went public again in 2010, and subsequently embarked on a series of acquisitions that broadened its software offerings.

In 2015, SciQuest reported $105.4 million in revenue, up 3.4 percent over 2014. The company had 510 employees as of the end of last year. The companies said that after the deal closes, SciQuest’s headquarters would remain in Morrisville.

Frank Vinluan is editor of Xconomy Raleigh-Durham, based in Research Triangle Park. You can reach him at fvinluan [at] xconomy.com Follow @frankvinluan

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