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Illustration: Rebecca Zisser/Axios

When Thoma Bravo last month completed its acquisition of Apttus, it was getting much more than a Silicon Valley "quote to cash" software company that had been valued at $1.8 billion by its venture capitalists. It was also getting an HR nightmare.

The big picture: Business Insider reports that Apttus founding CEO Kirk Krappe's sudden July departure was the result of alleged sexual assault during a company retreat. There also reportedly were allegations from several employees that Krappe had misled them about the company's performance, and that this "culture of dishonesty" extends to at least one senior executive who currently remains with Apttus, which is now being led by Thoma Bravo operating partner David Murphy.

  • VC backers included Iconiq Capital, Premji Invest, Salesforce Ventures, K1 Capital, IBM Ventures, Tower Equity and the Kuwaiti Investment Authority.
  • Thoma Bravo has declined to comment directly on what it did or didn't know going into the deal. But, in an emailed statement to Axios, the firm said:
We saw an opportunity to make a significant contribution to its business through the operational expertise and stability that we have a track record of bringing to bear. In a short period of time, we have made notable positive enhancements at Apttus by adding new employee talent, installing a proven executive leadership team, and changing company procedures. We are committed to supporting an ongoing process of improvement by introducing new and talented staff and insisting on best corporate practices – both of which will serve Apttus' employees, customers and investors well."

Why it matters: Private equity firms conduct due diligence on all prospective investments, but readily admit that there are things they don't learn until the deal is actually closed. Sometimes it's a complete surprise, sometimes it's the extent of a known issue. The #MeToo era will only heighten that discovery gap for many buyers — particularly given that so many purchase processes are kept in confidence within the C-suite, without the rank-and-file getting advance word.

Go deeper

Storms pummel flood-hit Pacific Northwest as border river overflows

An image of the water-logged Sumas Prairie area taken last Friday. Photo: B.C. Ministry of Transportation/Twitter.

The latest ferocious storm system to hit the Pacific Northwest triggered fresh evacuation orders and at least one mudslide in flood-ravaged British Columbia, Canada, late Sunday.

Threat level: Flood sirens sounded in Washington state as the Nooksack River overflowed. Henry Braun, mayor of Abbotsford, B.C., told reporters the water flow was headed toward the Canadian border city later Sunday. "There's nothing to stop it," he said.

Updated 5 hours ago - Health

First North American Omicron cases identified in Canada

COVID-19 testing personnel at Toronto Pearson International Airport in September. Photo: Steve Russell/Toronto Star via Getty Images

The first two cases of the new Omicron variant have been detected in North America, the Canadian government announced Sunday evening.

Driving the news: The World Health Organization has named Omicron a "variant of concern," but cautioned earlier on Sunday that it is not yet clear whether it's more transmissible than other strains of COVID-19.

Former Defense Secretary Esper sues Pentagon over book

Former President Trump and former Defense Secretary Mark Esper at the White House in 2020. Photo: Mandel Ngan/AFP via Getty Images

Former Defense Secretary Mark Esper filed a lawsuit Sunday against the Defense Department, accusing the Pentagon of "censoring" his First Amendment rights by redacting aspects of his upcoming book on the Trump administration.

The big picture: Esper, who served as defense secretary from July 2019 until he was fired by then-President Trump in November last year, alleges in the suit that "significant text" is "being improperly withheld from publication" of the manuscript "under the guise of classification."