Qatalyst bought Looker from Microsoft and Amazon before the transaction with Google

After Google's cloud leader, Thomas Kurian, approached the data analysis company Looker about a potential rapprochement earlier this year, Looker turned to a familiar face of Silicon Valley to get advice: Frank Quattrone.

Quattrone's investment bank, Qatalyst Partners, has been looking for potential candidates and has attracted interest from companies such as Microsoft and Amazon, according to sources familiar with the issue. Google aggressively pursued Looker, quickly gathering its offer of $ 2.6 billion, said the population, who asked not to be named because the negotiations were private.

Kurian, who previously led a team of 35,000 at Oracle, has spoken publicly about hiring fast sellers to support cloud leaders, but that's his first signature since his arrival at the head. from Google's cloud in November. The Looker purchase is the third in twenty-two years in Google's history, behind only Motorola and Nest, and by far the largest in the cloud, recently led by VMware co-founder Diane Greene.

Businesses are turning to Looker's business intelligence software to understand and visualize vast amounts of complex data, from marketing to financial planning.

Google paid a heavy multiple to close the deal. According to a Canaccord Genuity report, Looker will generate $ 140 million to $ 180 million in operating revenue this year. In the high-end segment, the 14-times price-to-market ratio is comparable to last year's most expensive software contracts, such as the purchase of Qualtrics by SAP and the acquisition of MuleSoft by Salesforce.

At its last fundraiser in December, Looker had 600 employees and was valued at $ 1.6 billion.

Investors were waiting for Google to get into the game of negotiations, given the huge advantage that Amazon Web Services has built and the amount of money invested by Microsoft to maintain second place. At the end of 2018, Google accounted for 7.6% of the cloud market, ahead of 32% for AWS and 13.7% for Microsoft, according to Canalys.

"An acquisition was a question of when, not if," Aaron Kessler, an analyst at Raymond James, wrote in a report published after Thursday's announcement. "With Looker apart, the question arises:" What's left on GCP's shopping list? "

Kurian began discussions with Looker during the first months of the year to better understand the technology and its use by customers. These discussions quickly turned into discussions on mergers and acquisitions and led Looker to hire Qatalyst to probe market interest, say people familiar with the topic. Potential contenders aroused keen interest, but nothing competed with Google's offer, they said.

Kurian told CNBC on Thursday that Alphabet's board had approved the deal and that it testified to the company's plan to expand into the company. He added that even if Google paid a premium of 63% to the Looker appraisal six months ago, he would not have entered into the deal if he did not he did not see it as a relutive element for Google.

Google and Looker knew each other very well before the transaction. The companies have 350 joint customers, including BuzzFeed, Hearst and WPP Essence, according to a blog post. The Google Cloud platform offers several products adapted to Looker technology, and CapitalG, the investment arm of the final phase of Google, led a $ 81.5 million round in 2017.

Google and Quattrone are also old. The company hired Qatalyst in 2008 for consulting work while Microsoft was trying to buy Yahoo, and Qatalyst represented Motorola when it was sold to Google in 2011. When Quattrone, who had previously led a career in investment banking, on Wall Street, started Qatalyst in 2008 Eric Schmidt, then CEO of Google, called the launch of "significant development for the technology sector".

A spokesman for Google declined to comment, as did a spokesman for Microsoft. An AWS representative did not respond to a request for comment.

– Jordan Novet and Jon Fortt of CNBC contributed to this report.

Correction: Thomas Kurian is at the helm of Google's cloud business. An earlier version of this post did not describe his title well.

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