Talend, a Redwood, Calif., company that sells data-integration software to clients including General Electric and Domino's Pizza, said Wednesday night it had agreed to pay $60 million in cash for Stitch, a Philadelphia-based company whose system helps clients move information to remote data warehouses without hiring data-integration specialists. The deal should close before the end of the year.
Talend shares fell sharply in trading Thursday, dropping more than 30 percent to around $43 a share, its lowest since last winter, after the company told investors about the Stitch acquisition and reported an increase in both sales and losses for the three months ended Sept. 30. Talend reported record sales of $52 million for the three months ended Sept. 30, up from $38 million a year earlier, and a quarterly loss of $9.2 million, compared with $5.4 million a year earlier.
"Stitch will work as an efficient high-volume way to acquire new cloud customers" who need "data integration, transformation, cleaning, preparing and cataloging," said Talend chief executive Mike Tuchen in a statement. Stitch split off from the former RJMetrics in 2016.
Stitch will join Talend as the Stitch Data Loader brand. Stitch CEO and cofounder Jake Stein will run it as a senior vice president, reporting to Tuchen. The deal was announced Wednesday.
Talend products, which speed user data to warehouses run by Amazon Web Systems (AWS), Azure, Google, and others, "complement ours," Stein said. With more companies seeking faster data transfer to feed business analytics, "we become the only vendor that can serve all levels of the market and all users of cloud analytics."
Stitch took about 30 of RJMetrics' 70 employees when it was set up in the summer of 2016. The rest, including cofounder Robert J. Moore, who at first hosted the firm in his Collingswood garage, joined Magento Analytics, now part of Adobe.
Backed by $16.5 million from Silicon Valley-based August Capital, Trinity Ventures, and SoftTech VC in 2014, plus an early $1.2 million round from Wharton professor Kartik Hosanagar, Paoli-based DuckDuckGo.com boss Gabriel Weinberg, and Fab.com founder Jason Goldberg, among others, RJMetrics had hoped to go public but had trouble boosting profits amid growing competition, leading to its split and the later profitable sale of both successor businesses.