When IBM purchased cloud-consultancy Bluewolf in late March for $200 million, Appirio CEO Chris Barbin quickly released a statement touting his company's independence and criticizing the wave of consolidation happening in the space.
He even told IBJ in April that he preferred to take the company public over selling it—a way maintain its “purity and clarity” and not be bogged down by the legacy behaviors of acquirers.
But thanks to a few market factors and a compelling case by a multi-billlion-dollar Indian company named Wipro Limited, Barbin's thinking evolved. And Appirio sold itself to Wipro in a $500 million all-cash deal announced Thursday.
"I was consistently impressed, from the first conversation we had," Barbin said about meeting with a Wipro executive in the summer after the Bangladore-based company expressed acquisition interest.
"The quality of the team and the people, the genuine nature, the humility—it just felt right. And the previous pursuits that have happened didn't feel the same way."
Among other things, Appirio helps enterprises integrate cloud-based services including Salesforce and Workday into their businesses. It will maintain its brand, retain its center of gravity in Indianapolis, and Barbin will continue to lead it.
The Wipro deal will consolidate its comparable consulting services under the Appirio brand, officials said.
In a phone call, Barbin reiterated the rationale for selling that he spelled out in a Thursday blog post. He said the decision dealt with customers, careers, competition and culture.
The first three were effectively market factors. Customers wanted more capabilities that Appirio couldn't deliver fast enough organically. Employees stood to benefit from expanded resources. And competitors, namely "legacy" services firms like Accenture and Deloitte, had been upping their games by acquiring cloud-consulting companies.
But the big factor was culture, Barbin said. In the weeks that followed the Bluewolf acquisition, Appirio had gotten a lot of inbound acquisition interest—some of which progressed to the late stages.
But Wipro won out, partly by presenting itself as a potential family and striking a chord with shared values.
Barbin said other suitors seemed to be only looking to make a deal to add offerings to their capacity, "and it wasn't like merging families."
Barbin had always been concerned about the prospect of being bogged down by corporate infrastructure, post-acquisition. But some of those worries were allayed after he spoke to the CEOs of two firms that Wipro previously acquired within the past two years.
"I talked to other executives about how they thought about those operations," Barbin said, "and it wasn't just lip service. It was real. They were operating independently."
Appirio has raised $117 million, mainly from three California venture capital firms that were ultimately seeking a return.
But Barbin said it wasn't a situation with the "board sitting around the table saying, 'Barbin you have to sell the business.'"
And while he preferred an IPO at one point, he never got close to filing, he said.
He wouldn't disclose the valuation of the company before the deal and whether the sale price was above or below that. But he did say the sale price was not "far off from" its peak valuation.
"There was a point in time when the market was incredibly frothy," he said, "and we could have timed it at that point but it may not have been with the right buyer."
The company has no Indiana-based investors, although employees do hold options and will benefit from the sale, he said.
He said the company was running a little behind its target to employ 577 people at its Indianapolis location by 2020—up from 172 here now—but the growth prospects after the deal should help it recover.
"They're a big firm with $8 billion in revenue and 170,000 employees and a tremendous amount of horsepower to scale things faster," Barbin said. "I do think it represents an opportunity to grow a whole lot faster in the region."