Private equity firm Thoma Bravo on Monday agreed to buy the software maker Coupa software (SWITCH) in a deal valued at $8 billion, including debt. COUP shares jumped on news of the buyout.
Two weeks ago, reports surfaced that another private equity firm, Vista Equity Partners, had targeted San Mateo, California-based Coupa.
Coupa shareholders will receive $81 per share in cash. The deal represents a 77% premium to Coupa’s closing share price on November 22, 2022, the last full trading day before media reports that Coupa could be acquired.
COUP shares catapulted 26.7% to 78.69 in morning trade on the stock market today.
Coupa said the deal included a significant minority investment from a wholly owned subsidiary of the Abu Dhabi Investment Authority.
The deal is expected to close in the first half of 2023.
“While the announced price is slightly higher than our recent expectations, it is below the level we have sensed from some recent conversations with investors and public remarks from at least one major shareholder, potentially creating pressure ahead of the expected first half 2023 close.” .” BMO Capital Markets Analyst Daniel Jester said in a report.
COUP Stock: Thoma Bravo Acquisition Spree
Additionally, Thoma Bravo has an upcoming deal to acquire a cybersecurity firm ForgeRock (FORG), for $2.3 billion.
Thoma Bravo previously bought Anaplan, Proofpoint, Impera and Barracuda Networks.
Thoma Bravo recently announced that it has closed fundraising totaling more than $32.4 billion in capital commitments.
According to Terry Tillman, an analyst at Truist Securities, Thoma Bravo’s current portfolio consists of more than 55 companies that generate approximately $20 billion in annual revenue.
“We believe Thoma Bravo’s strong fundraising efforts reflect sustained investor demand and continued interest in acquiring software companies, particularly public companies with consistently weak valuations,” Tillman said in a report.
He added: “Going into 2023, we believe we will continue to see increased PE activity within software as a result of the ongoing multiple compression in the industry driving down valuations of solid assets.”
Coupa Earnings Posted
The maker of business expense management software also posted third-quarter earnings.
Coupa said profit fell 50% to 15 cents on an adjusted basis from a year earlier. Revenue rose 17% to $217.3 million, the company said.
Meanwhile, Coupa’s software products cover employee travel and expense management, supplies and invoicing.
In addition, as of late 2018, Coupa has been in the process of being acquired. It purchased Llamasoft, Bellin, Hipperos, Exari and Yapta.
As of Friday’s market close, COUP shares have tumbled 61% in 2022.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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