DynaTrace Acquired by Compuware for $256M to Make Business Software Run Better

Another Boston-area business software company exits the scene today via acquisition. Following in the footsteps of Gomez (and many others), Waltham, MA-based DynaTrace, which helps companies manage the performance of their software applications, has been bought by Detroit-based Compuware (NASDAQ: [[ticker:CPWR]]) for $256 million in cash. The deal closed on July 1.

DynaTrace has 180 employees worldwide, and “substantially all of these,” including the management team (led by CEO John Van Siclen), are expected to stay with the merged company, according to the press release. DynaTrace started in 2005 and was VC-backed by Bain Capital Ventures and Bay Partners. The company raised about $22 million in total financing, including $4 million at the beginning of this year. So the acquisition looks like a very strong exit for the investors.

DynaTrace had $26 million in revenues over the past 12 months, the release stated, and is expected to add between $35 million and $45 million to Compuware’s top line in fiscal year 2012.

Compuware counts among its big customers Google, Facebook, Yahoo, Adobe, Amazon.com, the BBC, USA Today, and Subaru (and now DynaTrace customers like Zappos, SAS, and Macy’s, if they weren’t already). The firm was founded in 1973 and went public in 1992. By acquiring companies like Gomez and DynaTrace, Compuware is making a strong move in performance management software and user experience for Web and mobile applications.

Author: Gregory T. Huang

Greg is a veteran journalist who has covered a wide range of science, technology, and business. As former editor in chief, he overaw daily news, features, and events across Xconomy's national network. Before joining Xconomy, he was a features editor at New Scientist magazine, where he edited and wrote articles on physics, technology, and neuroscience. Previously he was senior writer at Technology Review, where he reported on emerging technologies, R&D, and advances in computing, robotics, and applied physics. His writing has also appeared in Wired, Nature, and The Atlantic Monthly’s website. He was named a New York Times professional fellow in 2003. Greg is the co-author of Guanxi (Simon & Schuster, 2006), about Microsoft in China and the global competition for talent and technology. Before becoming a journalist, he did research at MIT’s Artificial Intelligence Lab. He has published 20 papers in scientific journals and conferences and spoken on innovation at Adobe, Amazon, eBay, Google, HP, Microsoft, Yahoo, and other organizations. He has a Master’s and Ph.D. in electrical engineering and computer science from MIT, and a B.S. in electrical engineering from the University of Illinois, Urbana-Champaign.