Chef snapped up by Progress for $304m

Chef, a maker of server automation tools that became popular with the rise of DevOps, is set to bought out by fellow software maker Progress for US$220 million (A$304 million) in cash.

“Chef is a market leader with best-in-class products, a vibrant developer community, an impressive blue-chip customer base and highly skilled and engaged employees,” Progress CEO Yogesh Gupta  said in a statement.

“[It] has built a successful business, product portfolio and go-to-market strategy and we will expand and accelerate that by bringing our resources to bear, building on the momentum Chef has established to date.”

Progress said it will pay US$220 million in cash for the company, “subject to customary adjustments.”

The company said the cash would be drawn from a mix of funds on-hand as well as existing credit facilities.

Chef’s annual recurring revenues are “over US$70 million”; the transaction “is expected to be accretive beginning in Q1 FY2021 to both non-GAAP earnings per share and cash flow,” Progress said.

Progress is hoping “will bolster [its] core offerings, enabling customers to respond faster to business demands and improve efficiency.”

“The acquisition also aligns with Progress' growth strategy through accretive acquisitions and will add both scale and cash flow,” it said.

The acquisition is expected to close in October 2020, subject to obtaining regulatory consents and satisfying other closing conditions.