Private equity firm Thoma Bravo on Monday agreed to buy software maker Coupa Software (COUP) 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 the 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, 2022, the last full trading day prior to media reports that Coupa could be acquired.

COUP stock catapulted 26.7% to 78.69 in morning trades 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.

“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 of 2023 close,” said BMO Capital Markets analyst Daniel Jester in a report.

COUP Stock: Thoma Bravo Acquisition Spree

In addition, Thoma Bravo has a pending deal to acquire a cybersecurity firm ForgeRock (FORG), 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 Terry Tillman, analyst at Truist Securities, 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,” said Tillman 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 releases 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.


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