Keynote Systems, a global provider of Internet and mobile cloud testing and monitoring, became a privately held company this week with its acquisition by an affiliate of private equity investment firm Thoma Bravo LLC.
The all-cash transaction of approximately $395 million meant a windfall for stockholders, who received $20 for each share of Keynote common stock. That figure represents a 48 percent premium over the closing price listed on June 21, the day before the pending transaction was announced. At the same time, Keynote also announced the retirement of longtime CEO Umang Gupta, and the naming of his replacement.
“For over 15 years, we at Keynote have focused on creating a company built to last,” Gupta said in a statement. “I am gratified to have served as the company’s CEO through its multiple phases: during the early dot-com boom years of spectacular growth, during our journey to survive as a profitable entity after that boom faded, and during our subsequent growth revival phase as the mobile telecom revolution began. I want to thank the entire family of Keynote employees whose loyalty, hard work and commitment to our collective success brought us to this positive juncture.”
Keynote will stay in its San Mateo, Calif., headquarters as Gupta transitions his CEO responsibilities over to newly named President and Chief Executive Officer Jennifer Tejada, a tech industry veteran.
“Jennifer brings a passion for innovation and unparalleled experience, to hit the ground running with the tremendous platform that Umang and the Keynote team have built,” said Thoma Bravo partner Seth Boro, in a statement. “She possesses a wealth of experience growing leading companies through product innovation, marketing, sales and strategic acquisitions, and we look forward to working with her to continue growing the company.”
Keynote has had an interesting ride in the business. Gupta recalled in an interview with the San Francisco Business Times that he took the company public in February 2000, raising $350 million cash just weeks before the stock market crashed. The money not only helped the company survive, but allowed it to acquire other companies at a discounted price in the wake of the crash.
Today, it’s a top player in the website monitoring business, and appears to be in a good position to stay that way for the long haul.
Gupta told The Wall Street Journal he is encouraged by signs that Keynote should continue to thrive under its new ownership. “When I got involved, my entire goal was I wanted to build a company that will outlast me,” he said. It looks like he’ll get his wish.
Through organic growth and over a dozen strategic acquisitions, Keynote branched out into website load testing, streaming quality and user experience, the company noted in a release. It was one of the first companies to recognize that the quality of the mobile data network, and of mobile websites and apps, was growing quickly in importance, even before the advent of smartphones. To that end it acquired OnDevice in 2001, SIGOS in 2006 and Device Anywhere in 2011, the same year in which Keynote reported over $100 million in annual revenue. Keynote currently maintains the largest cloud-based mobile and Web performance test, measurement and monitoring infrastructure in the world, used by over 4,000 enterprise customers worldwide.
New company president Tejada brings an interesting background to the position. She most recently served as executive vice president and chief strategy officer for Mincom, a global enterprise software company, and will no doubt use that experience to further expand Keynote Systems’ influence and reach.
“Keynote has built an incredible brand with loyal customers, a talented team and market-leading products,” she said. “As businesses increasingly shift core customer interactions and transactions to mobile and online, performance monitoring for those platforms is key. This transaction will allow us to continue to innovate for our customers with the increased flexibility of a private company.”
With no shareholders to report to, it will be interesting to see just how well Tejada exercises that “flexibility.”
Edited by Rachel Ramsey