Private equity firm Thoma Bravo on Monday agreed to buy software maker Coupa Software in a deal valued at $8 billion, including debt. COUP stock soared on the buyout news.
Reports surfaced two weeks ago that another private equity firm, Vista Equity Partners, was eyeing San Mateo, Calif.-based Coupa.
Coupa shareholders will receive $81 per share in cash. The deal represents a 77% premium to Coupa's closing stock price on Nov. 22, the last full trading day prior to media reports that Coupa could be acquired.
COUP stock catapulted 26.7% to close at 78.65 on the stock market today.
Coupa said the transaction includes 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. Excluding debt, the deal is valued at $6.15 billion.
"While the announced price is slightly higher than our latest expectations, it is below the level we sensed from some recent investor conversations and public remarks from at least one major shareholder, potentially creating tension ahead of the anticipated first half 2023 close," BMO Capital Markets analyst Daniel Jester said in a note to clients.
COUP Stock: Thoma Bravo Acquisition Spree
In addition, Thoma Bravo has a pending deal to acquire cybersecurity firm ForgeRock for $2.3 billion.
Thoma Bravo earlier bought Anaplan, Proofpoint, Impera and Barracuda Networks.
Thoma Bravo recently announced that it had completed fund-raising totaling more than $32.4 billion in capital commitments.
According to Truist Securities analyst Terry Tillman, Thoma Bravo's current portfolio comprises of over 55 companies that generate approximately $20 billion of annual revenue.
"We believe the strong fundraising efforts of Thoma Bravo reflect resilient investor demand and ongoing interest to acquire software companies, especially public companies with persistently weak valuations," Tillman said in a report.
He added: "As we head into 2023, we believe we will continue to see elevated PE activity within software as a result of persistent multiple compression across the industry reducing valuations of solid assets."
Coupa Earnings Released
The maker of business spending management software also released 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, procurement and invoicing.
In addition, since late 2018, Coupa has been on an acquisition spree of its own. It purchased Llamasoft, Bellin, Hipperos, Exari and Yapta.
As of Friday's market close, COUP stock had plunged 61% in 2022.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
