On Monday, WP Engine announced that it is acquiring Flywheel.
Flywheel is an Omaha-based startup that has helped designers create, build, host, and manage WordPress sites. The deal was described as the largest of its type in the WordPress industry in a press release by the acquiring company – WP Engine.
It is notable that WP Engine received financial backing for $250 million (according to Pitchbook) in early 2018 by Silver Lake Management. This transaction includes more than just investment, as it was described at the time as a buyout from a variety of sources; much of the leadership has remained in place following the transaction. The transaction was intended to help facilitate the continued growth and serve as a mechanism for WP Engine to roll up additional WordPress companies such as Flywheel.
Currently, WP Engine employs more than six hundred and forty people, primarily in Austin, Texas. The company is run by CEO, Heather Brunner. Brunner has been a Partner at the Austin based Capital Factory and sits on a number of Boards – including Localeur and Camden Living. She is also well-known for her work regarding female equality in the workplace. To hear her talk more about this, check out this interesting conversation with employee, Kelsie Perkes, about the role of women in the workplace. In fact, according to Market Screener, 67% of WP Engine’s C-Suite are women.
Like Flywheel in Omaha, WP Engine is also deeply committed to Austin, its home community. As many may know, Dusty Davidson is also a co-founder of Silicon Prairie News (“SPN”). His personal commitment to the Silicon Prairie through his work at Flywheel – but also in founding SPN and Big Omaha – is well-regarded regionally and nationally. At SXSW in March of this year, Ms. Brunner remarked,
“Companies that are going to thrive here [Austin] are those that help others and give back to the community. Businesses will have to work hard on who they are and why they exist.” This community-centric statement would be typical of the sentiments any of the founders of Flywheel who have consistently stressed the importance of company culture and community.
According to the same Market Screener report cited earlier, the company publicly announced Annual Recurring Revenue (“ARR”) in January 2019 of more than $132 million. This information is particularly interesting because the article identified customers of approximately 90,000 in January and the press release this week – announcing the acquisition – identified that the new WP Engine will have approximately 120,000 customers. This suggests that the acquisition of Flywheel provides a significant boost in customers. It also provides some framework for the context of the Flywheel transaction for WP Engine. (Visit https://www.marketscreener.com/news/WP-Engine-Announces-132M-in-Annual-Recurring-Revenue–27931976/ to read the complete Market Screener article from January 2019.)
In addition to acquiring Flywheel, WP Engine and their financial partner Silver Lake Management have acquired a variety of other companies that now reside within the WP Engine family, including Studio Press, Arrays Themes and Atomic Blocks, and Global Edge Security. This bolstered the combined company in some key ways – including cybersecurity improvements, consistent popular themes for WordPress, and new tools for various WordPress plug-ins (including Gutenberg).
Capital Factory was still a significant shareholder in WP Engine at the time of WP Engine’s sale to Silver Lake Partners – as was Eric Ries, the author of the Lean Startup.
According to Pitchbook, Silver Lake Partners has more than $50B in assets under management. The company is based in Menlo Park, California. Silver Lake also has large holdings in a variety of businesses and industries – including AMC Theatres from Kansas City, Missouri. The identified person for the Flywheel/WP Engine transaction within Silver Lake is Mark Gillett who is also a Board member of WP Engine.
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