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Redwood, Calif.-based Informatica says demand for its services is projected to grow in the coming years. Industry analysts forecast the market for cloud computing will grow by 35 per cent annually through 2018, according to Informatica’s chief executive officer Sohaib Abbasi.pressureUA/Getty Images/iStockphoto

The Canada Pension Plan Investment Board is taking a stake in a technology company that specializes in harnessing collections of unwieldy corporate data for businesses around the world.

CPPIB and London-based private equity group Permira Advisers Ltd. said they will spend $5.3-billion (U.S.) in an all-cash deal to take Informatica Corp. private, a multifaceted data company that is trying to build sales momentum for its software products that collect, access and protect data for 5,500 enterprises.

The universe of information assets that companies are managing is rapidly expanding. "Think about how you use your phone to check prices, to check a website," said Mark Jenkins, global head of private investments for CPPIB. "The number of points of data that organizations accumulate in different systems is just growing."

Redwood, Calif.-based Informatica says demand for its services is projected to grow in the coming years. Industry analysts forecast the market for cloud computing will grow by 35 per cent annually through 2018, according to Informatica's chief executive officer Sohaib Abbasi. And the data security business should grow to be a $1.2-billion market by that same year, he said on a quarterly conference call.

The sale of Informatica took several months to come together. In January, activist investor Elliott Management, the hedge fund of U.S. billionaire Paul Singer, took an 8 per cent position in the stock. Although CPPIB invests in Elliott's hedge fund through its external portfolio manager program, that relationship did not factor into this opportunity, Mr. Jenkins said.

After Elliott kick-started the sale process, CPPIB and Permira entered into a competitive bidding process.

"Tech is one of their five key sectors and it accounts for 35 per cent of all the fund investments they've made since 1997," Mr. Jenkins said of Permira, adding that the firm's tech expertise was one of the main draws of this partnership. The two institutions had previously considered working as partners on other deals, but until now, CPPIB had just been an investor in Permira's fund.

CPPIB has made its own high-profile tech investments over the years, including a stake in Skype, which it has since sold, and an investment in Alibaba Group Holding Ltd.

Together, the two new investors plan to bring some of their expertise to Informatica as the company looks to improve its sales processes.

Informatica's stock hit a high of $61.15 in mid-2011, but in 2012 and 2013, the company had some quarters where revenue in a critical business line slipped. "It was largely related to making a lot of changes in the sales force that needed to be done after 2012, but at some point you need to stop making those changes," Mike Berry, Informatica's chief financial officer, said at a recent conference.

In fourth-quarter results announced in January, Informatica said annual revenue climbed above $1-billion for the first time and the business is generating plenty of cash. The stock has climbed more than 22 per cent in the past year to close at $45.83 on Monday.

"I think the challenge that they faced here to date – and part of the reason they were put into play – is how they would optimize their sales management going forward," Mr. Jenkins said. "They've obviously, like any organization, got a number of products – it's the integration of those and being able to sell those. That will be the thing that – as an organization and with Permira and management – we'll be focused on going forward."

As Informatica bolsters its sales, plenty of other companies are looking to capitalize on "big data" and the movement of information into the cloud. Oracle Corp., International Business Machines Corp. and SAP are among the largest to offer products that help businesses manage their increasing streams of data and analyze these facts and figures. But CPPIB was drawn to Informatica's so-called vendor-neutral approach to the business.

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