Acquia’s New CEO Eyes Acquisitions, Not an Exit (Yet)
Acquia is known for software that helps businesses manage content on their websites. But these days, the 11-year-old company describes itself as a builder of “digital experiences,” a nod to the ever-expanding list of technological vehicles through which brands market their products—think mobile apps, social media, voice-controlled devices, and augmented and virtual reality experiences.
“There’s just so many different channels where companies want to communicate with their customers and constituents,” says Acquia CEO Michael Sullivan, who took the helm late last year. “What’s interesting about this space is it’s changing fast.”
I recently sat down with Sullivan (pictured above) at Acquia’s headquarters in downtown Boston to find out what he’s been up to during his first few months on the job. It’s worth keeping an eye on the company, which is one of the largest (about 800 employees worldwide) and best-funded (around $175 million in venture capital raised) privately held software businesses in Boston. The company builds software products and services on top of Drupal, an open-source Web publishing system created in the early 2000s by Dries Buytaert, Acquia’s co-founder, chief technology officer, and chairman.
It’s no surprise, given the changing nature of Acquia’s industry, that Sullivan says one of his early priorities has been increasing the size of the company’s research and development budget. In recent days, the company listed more than 70 open positions on its website, mostly in sales, but also jobs in engineering and product management. This year, Acquia has touted the launch of voice-enabled search technologies and e-commerce tools, among other new products.
Acquia might also pursue acquisitions to build out its capabilities, seeking startups in areas such as content creation and “intelligence around content,” Sullivan says. (He didn’t elaborate.)
One of the big questions is whether Sullivan is cooking up an exit for Acquia. The enterprise tech firm has been seen as an IPO candidate for several years. Sullivan says Acquia is “keeping its options open” but isn’t “planning an IPO immediately.”
Its executive team has experience at publicly traded companies. Sullivan was previously a senior vice president at Hewlett Packard Enterprise (NYSE: HPE) and Micro Focus (NYSE: MFGP), and he hired former Akamai Technologies (NASDAQ: AKAM) vice president of finance Chris Andersen to be Acquia’s chief financial officer, and former Micro Focus vice president Stephen Reny to serve as Acquia’s chief operating officer.
It’s just speculation on our part, but if Acquia were to get acquired instead of going public, perhaps it would garner interest from Amazon (NASDAQ: AMZN), an Acquia investor that has provided cloud data storage services to the company; or Salesforce (NYSE: CRM), a cloud-based software business that seems to overlap with Acquia in some areas, such as products aimed at delivering personalized online shopping “experiences.” Or perhaps a more direct competitor, like Adobe (NASDAQ: ADBE), might try to snap up its rival.
“We have inbound interest from time to time,” Sullivan says, without naming inquiring companies.
He claims Acquia isn’t actively seeking an exit. “But as our plans develop over the next year, we may decide that it’s something to pursue to accelerate [Acquia’s growth] even faster,” he adds. “As we go bigger, we will possibly look at whether we need access to capital, whether through the [public] markets or private capital. The good news is I think we’re a very attractive asset right now.”
Acquia has said it generated $153 million in revenue in 2016, up from about $100 million two years earlier. Sullivan declined to share the company’s revenue total from last year. The company says it expects to become cash-flow positive this year.
“We’re growing very fast,” Sullivan says.