Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
The daily-deal operator buys software development company Obtiva.
Groupon Inc. says it has acquired Chicago-based software firm Obtiva, a move that could help the daily-deal operator bolster its own engineering staff. Groupon did not say how much it paid for Obtiva.
Obtiva focuses on the open source Ruby software language and a related web development framework called Ruby on Rails; earlier this year, rival daily-deal operator LivingSocial bought technology consultancy InfoEther Inc., whose work also focuses on Ruby.
“We’ve been working side-by-side with our Obtiva colleagues since way back in 2009, when Groupon had a handful of engineers,” writes a Groupon spokeswoman in a blog post. “Today, many of [our] development teams have Obtivians on them (and several are led by Obtivians). We decided to stop living in sin and tie the knot.”
The acquisition is the latest sign that Groupon wants to shore up its technology infrastructure, which, in the company’s short history, has been lacking, says Lou Kerner, vice president of equity research at Wedbush Securities. Groupon last month acquired Zappedy Inc. for $10.3 million. The company creates software applications aimed at helping bricks-and-mortar retailers better understand, attract and retain customers. And Groupon in April bought Pelago, creator of location-based check-in service Whrrl.
“It’s a positive sign for Groupon that they’re making these acquisitions,” says Kerner. “But integrating them into a seamless user experience will be the challenge.”
That’s because the technologies that Groupon has been buying do not easily work together, he says. They require skilled engineers, which are a valuable commodity. That could explain why Groupon, in the blog post announcing the move, noted that it is looking to expand its engineering team.
“It’s hard to know what Groupon is doing with each of these acquisitions but often tech companies don’t just buy another company just for their technology, they’re also doing it for the talent,” he says. “So even if they end up trashing the technology, they’ve added people who are experts on building applications. Those people are critical to have—particularly in a world where Groupon increasingly may find itself competing against Google, which may have the best engineering team in the world.”