American Fork-based Domo, a cloud software company that specializes in business intelligence, data apps and artificial intelligence tools, is selling substantially all its assets, including its AI and data platform, and some of its liabilities to Progress Software Corp. in a $400 million deal.
After it changes its name and ticker symbol, Domo will continue operating as a publicly listed corporation. Domo will maintain $900 million of net operating loss carryforwards and a few unspecified assets.
Progress Software Corp. is a public company that makes infrastructure software for building, deploying and managing business applications. Its global headquarters are in Burlington, Massachusetts.
When the deal closes, expected to be by Nov. 30, the Domo owners will have net cash of approximately $246 million, or $4.84 per share, representing an 81 percent premium to the 30-day weighted average stock price, as well as more than $900 million of net operating loss (NOL) carryforwards.
At closing, Domo's operating business and platform will become part of Progress. Progress expects to continue serving Domo customers and supporting the Domo technology platform, while bringing additional scale, resources and enterprise software expertise to its ongoing development. Until the transaction closes, Domo and Progress will continue to operate as separate companies and Domo will continue to serve customers and operate in the ordinary course of business.
After closing, Domo Inc., which is a Delaware holding company, will remain a separate publicly traded entity under a new name with limited operating expenses and a debt-free balance sheet. The board said it intends to use the proceeds from the transaction to identify opportunities to monetize its NOLs. It will consider potential transactions where the company can employ its expertise in AI and automation to enhance profitability as well as options to return capital to shareholders. The company will continue to be led by founder and CEO Josh James and the current board of directors. At closing, Domo will pay off its existing credit facility in full, James said.
"After a comprehensive review of strategic alternatives, with the assistance of our outside financial and legal advisors, the board determined that the proposed sale of Domo's business to Progress represents the best path forward for Domo's stockholders," said Carine Clark, chair of Domo's board. "This transaction is designed to deliver value for stockholders while preserving Domo's significant tax attributes and providing the Domo platform with resources and scale for its next chapter with Progress."
"Domo has always been about helping organizations put data to work in ways that create real business value," said James. "I am deeply grateful to the employees who built this company, supported our customers and kept pushing the platform forward through every stage of our journey. Their work created the opportunity that brought us to this moment. I believe Progress can provide a strong, long-term home for Domo's business and help extend the impact of what our team has built."
"Domo's technology brings together data integration, governed analytics, automation and AI-powered data products in a way that helps customers move faster with trusted data," said Yogesh Gupta, president and CEO of Progress Software. "Progress' entire product portfolio is about delivering context and control for reliable, secure and cost-effective AI, and this acquisition will further strengthen our ability to do so."
Under the terms of the definitive agreement, Progress will acquire substantially all of Domo's assets, including its operating business, technology platform, customer contracts, employees, intellectual property, vendor relationships, foreign subsidiaries and other assets and obligations related to the business.
Founded in 1981, Progress Software operates in 20 countries with about 2,800 employees.
