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Data Firm Informatica Plans to Raise Nearly $1 Billion in IPO

Data management software firm Informatica LLC said it expects to raise nearly $1 billion when it returns to the public market on Wednesday and plans to use the amount to pay down some of its debt.

Redwood City, Calif.-based Informatica priced its initial public offering at $29.00 per share—at the low end of its target range of $29.00 to $32.00 per share—giving the company a valuation of $10 billion, according to a person familiar with the IPO. The company’s shares will trade on the New York Stock Exchange under the symbol INFA.

Private-equity firm Permira and the Canadian Pension Plan Investment Board in 2015 took the company private in a transaction valued at $5.3 billion after roughly 15 years as a public company. The company has since moved its on-premises products to a cloud-based platform and built a subscription business. Permira and CPPIB will control about 85% of the company after its IPO.

Informatica, which lists drugmaker

Eli Lilly

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& Co., consumer-goods giant Unilever PLC and supermarket chain

Kroger Co.

among its customers, helps companies connect and manage their data across the cloud and on-premise systems, allowing organizations to better analyze the data they collect.

The company reported net debt of $2.77 billion as of June, according to a prospectus that Informatica filed to the Securities and Exchange Commission earlier this month. Its leverage ratio—currently at 5.5 times net debt to adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda—is set to come down to 3.9 times after the IPO, Chief Financial Officer

Eric Brown

said, adding that the company would use the roughly $900 million in expected proceeds to bring down its debt.

Informatica CFO Eric Brown, left, and CEO Amit Walia


Computer Science LLC

Adjusted Ebitda for the first six months of this year was $175 million compared with $168 million in the first six months of 2020, Mr. Brown said.

“What we’re going to do is pay down a large portion of the debt that we incurred back in circa 2015, at the time of privatization,” said Mr. Brown. “So what we’ll do is a traditional IPO…and then concurrent with the close of the IPO, we will be paying down that amount of debt, improving the credit rating of the company and actually improve our cash flow profile with reduced debt and interest rate.”

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Informatica joins a host of tech-industry companies to go public this year. U.S. technology companies raised $64.4 billion in 109 IPOs through Oct. 21, according to Dealogic, a data provider. That’s up from 49 such IPOs during the prior-year period, which raised $22.6 billion, Dealogic said.

Informatica expects to use some of the cash it generates to reduce its debt ratio to approximately two times adjusted earnings during the next two to three years, according to Mr. Brown.

Informatica said it has invested more than $1 billion in research and development since 2015 in an effort to move its products to a cloud-based platform and to shift its business model towards one based largely on subscriptions.

“We have completed the business-model transformation that we set out to achieve,” said Mr. Brown. He held roles at videogame giant

Electronic Arts Inc.

and other companies before he joined Informatica as CFO in 2018.

Informatica’s growing valuation—the company was valued at $5.33 billion in 2015—reflects the rising importance of data to every aspect of business, Chief Executive

Amit Walia

said. “Every CIO I talk to is, like, my board wants me to become like a Google and make decisions data-led,” he said, referring to the role chief information officers play in leading the shift toward data-focused businesses.

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Kroger, for example, uses Informatica to manage data such as tracking numbers, replenishment cycles, expiration dates, storage temperatures, ingredients and more. The supermarket chain uses that data to manage its supply chains, track customer histories and share insights with consumer-goods companies.

“The importance of precision, or accuracy, around all of the data assets is non-negotiable,” said

Yael Cosset,

Kroger’s chief information officer. Informatica data systems help Kroger reduce the number of out-of-stock items and minimize lost sales, he said.

Informatica’s Intelligent Data Management Cloud platform enables businesses to extract and analyze their data stored across multiple systems, including those in the cloud. Machine learning and other artificial-intelligence techniques help organizations discover relationships between pieces of information and better integrate, analyze and govern data.

“Informatica occupies some of the most strategic real estate, providing some of the most strategic functionality to its customers and its partners, in the data management ecosystem,” said Brian Ruder, a partner at Permira. “And we’re not sellers.”

The company reported a net loss of $36.3 million on revenue of $675.5 million for the six months ended June 30, compared with a loss of $102.8 million on revenue of $619.3 million during the prior year period.

Write to John McCormick at

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