Software AG Expands Into Data Integration Realm With StreamSets Acquisition

Software AG is acquiring data integration platform developer StreamSets in a deal valued at more than $580 million, the companies said Tuesday.

Software AG, a developer of digital business and application integration software, described the acquisition as the first of a merger and acquisition effort “designed to accelerate growth by opening up access to new parts of [the company’s] €61 billion total addressable market.”

“This acquisition is a major milestone for Software AG,” said Sanjay Brahmawar, Software AG CEO, in a statement. “We’re acquiring a fast-growing business in a cloud market growing 26 percent. It’s technology and team will further differentiate our hybrid integration offering for customers and fully complement our strategy to deliver sustainable, profitable growth.”

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Software AG expects to complete the acquisition, which is subject to regulatory approvals, in the first half of 2022. In addition to the €524 million (U.S. $581.7 million) purchase price, Software AG is paying transaction fees and “a customary retention package” for StreamSets’ senior management.

Software AG is funding the acquisition with cash and the company’s existing credit facilities.

Based in Darmstadt, Germany, with U.S. headquarters in Reston, Va., Software AG provides integration platform-as-a-service software. The company’s product portfolio covers application integration, APIs and microservices; IoT integration and analytics software; and IT and business transformation tools and services. It also markets its ADABAS database and Natural programming tools.

Software AG has been transforming itself and its strategic direction under its multi-year Helix initiative to achieve “sustainable, profitable growth” and reach €1 billion in annual revenue in 2023. Helix was launched in early 2019, about six months after Brahmawar took over as the company’s CEO in August 2018.

In December private equity firm Silver Lake made a €344 million (U.S. $382.5 million) investment in Software AG, which is a publicly held company.

StreamSets, founded in 2014, is a developer of DataOps software, tools used to manage data pipelines and data integration tasks, including collecting, consolidating and moving data across hybrid environments.

StreamSets, a technology partner with Snowflake and Databricks, raised $76.2 million in four rounds of venture funding since its launch. The company recorded four-year CAGR revenue growth of 70 percent through 2021, Software AG said without disclosing actual revenue numbers.

Software AG plans to capitalize on StreamSets’ software by offering it to the Software AG customer base, creating joint solutions – starting in the iPaaS space – using both companies’ product portfolios, and leveraging Software AG’s operational scale to accelerate StreamSets’ growth.

The StreamSets DataOps Platform is complementary to Software AG’s digital business portfolio, which integrates transaction data flowing through hybrid application landscapes, Software AG said.

The StreamSets acquisition also will provide Software AG with an entry into the cloud data integration portion of the wider data integration market, the company said, a segment that is growing 26 percent annually in a market expected to reach $3.5 billion by 2025.

Brahmawar said the acquisition of StreamSets, based in San Francisco, will also help Software AG expand its presence in North America. Software AG said the two companies target the same enterprise customers and IT buyers.

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