In a deal that values the provider of cloud-based business software at $8 billion, Coupa Software Inc. said that it has agreed to be taken private by buyout company Thoma Bravo.
After falling more than 60% so far this year, Coupa’s shares rose 27% in response to news of the purchase. Shareholders of Coupa will get $81 per share as part of the agreement, a premium of 30.5% over the stock’s closing price on Friday and a premium of 77.2% over November 22, when takeover interest in the firm was first made public.
An arm of the sovereign wealth fund Abu Dhabi Investment Authority has made a minority investment in the all-cash transaction, which has an enterprise value of $8 billion when debt is included.
The Ukraine crisis, high inflation, weak consumer demand, and the decline in global stock prices this year have all been particularly bad for the tech industry. Because of this, several software companies have become acquisition targets for private equity groups, while deal-making has been slowed down by a shortage of bank loan financing.
Thoma Bravo’s acquisition of Coupa Software will be partially funded by a $2.6 billion loan package from a syndicate of 19 direct lenders, including Sixth Street. According to persons familiar with the situation, other direct lenders on the deal include HPS Investment Partners, Oaktree Capital Management, Apollo Global Management Inc., and Blackstone Inc.
Following previous transactions, this year involving software businesses like Anaplan, Ping Identity, ForgeRock, and Sailpoint Technologies, the take-private of Coupa Software is Thoma Bravo’s most recent transaction.
HMI Capital, a shareholder in Coupa, had previously stated that it would support a prospective transaction for more than $95 per share for the company.
Business-spend management software is offered by Coupa Software, which helped businesses control their acquisition of products and services in 2016. Coupa Software went public in 2016. For the three months that concluded on October 31, it reported an increase in total sales of 17% and a net loss of $84.1 million.
Coupa was advised by Qatalyst Partners and Freshfields Bruckhaus Deringer, while Thoma Bravo was counseled by Goldman Sachs & Co, Kirkland & Ellis, and Piper Sandler.
What Thoma Bravo might pay for Coupa, whose shares have suffered this year, could not be ascertained. Coupa’s investors have been outspoken about what they think the business should be worth.
Coupa’s largest shareholder, HMI Capital Management, stated earlier this week that the software company should sell for at least $95 per share. Coupa has also spoken with Meritage Group, another shareholder, about its opinions on the worth of the business.
The transaction, which was unanimously agreed by the Coupa Board of Directors, is anticipated to close in the first half of 2023, subject to the usual closing requirements, such as shareholder approval and obtaining necessary regulatory approvals. No financing requirements apply to the transaction.
Coupa’s common stock won’t be listed on any public market when the deal is finished. The Coupa name and brand will still be used by the business.
About Coupa Software
The Business Spend Management (BSM) software in the cloud, known as Coupa, combines operations between supply chain, procurement, and financial activities. With regard to their business expenditures, Coupa enables businesses all around the world to maximize value and operationalize purpose. Learn more about Coupa here (https://www.coupa.com/products/procurement)
About Thoma Bravo
As of September 30, 2022, Thoma Bravo, one of the biggest private equity firms in the world, has more than $120 billion in assets under management. The company makes investments in creative, growth-oriented businesses in the software and technology industries. Thoma Bravo works with its portfolio companies to implement operating best practices, drive growth initiatives, and make accretive acquisitions with the goal of accelerating revenue and earnings. This is done by leveraging the firm’s deep industry expertise and proven strategic and operational capabilities. The company has purchased or made investments in more than 420 businesses totaling over $235 billion in the last 20 years. The company has locations in San Francisco, Miami, and Chicago.
