Global software development and digital transformation company ThoughtWorks is to be acquired by London-based private equity firm Apax Partners. The terms of the deal were not disclosed and it is expected to close in Q4 2017.
ThoughtWorks was founded in 1993 in Chicago by Neville "Roy" Singham and has remained privately owned as the organization has grown to over 4,500 employees spread across 42 offices in 15 countries. It is recognized as being at the leading edge of software development practices and transformations, being an early advocate of Agile approaches as well as the development and usage of open source software. It is also known for its commitment to diversity and was named the top company for women technologists at the 2016 Grace Hopper Conference.
Dr. Rebecca Parsons, the Chief Technology Officer at ThoughtWorks said in a statement:
Over the years, ThoughtWorks has gone through many iterations but what has been consistent is our commitment to software excellence. We credit this to having a combination of the most talented, passionate development teams, collaborative practices, and a culture of experimentation and innovation which blend to create a technology capability that is second to none. Together with Apax Partners, we remain committed to having technology at the core of everything we do while building a diverse, inclusive work environment.
Apax Partners was founded in 1981 and is a leading global private equity advisory firm with headquarters in London and New York with a focus on investment in companies across the four global sectors of Tech and Telco, Services, Health Care and Consumer. A spokesman from the company said in a statement:
Software and technological excellence are driving competitive advantage in the corporate marketplace more than ever before, putting agile and advanced development approaches in high demand… We see significant opportunities for the company to develop further and look forward to working alongside the existing management team as the company enters its next phase of growth.
Martin Fowler, Chief Scientist at ThoughtWorks, cited reasons for why ThoughtWorks is being sold and what the future holds in a blog post. He cited Roy’s increasing interest in his activist work and difficulties in changing ownership whilst preserving its vision and operating model:
Setting up… a trust implies a change of ownership, and a change of ownership involves taxes. A consulting company runs on a relatively small margin of cash, and the tax bill involved in a change of ownership can be crippling… Despite several years of effort, we haven’t found a way that would preserve the company in its current form.
He continues in the post to describe what the future might look like for ThoughtWorks:
Apax… seem to recognize the traits that have allowed us to succeed so far. They want us to continue with our business practice, including our three-pillar model, and are eager to maintain the existing management team that Roy has built… ThoughtWorks has always been, to a large extent, Roy’s social experiment to see if a commercial company can be run in a different way to the prevailing wisdom. In the last two decades we’ve built a company which is capable of operating successfully without him. The next phase of the experiment is to see if that company can continue to succeed under more conventional ownership.
The acquisition has also resulted in discussion on many forums such as Reddit and Hacker News, with the major themes drawing parallels between other consulting company acquisitions such as Pivotal Labs and the presumption of potential cost cutting and office closures.
The full announcement is available on the ThoughtWorks website.