Coupa Software Inc. (COUP.O) announced on Monday that Thoma Bravo, a buyout firm, has agreed to acquire the cloud-based business software company for $8 billion.
After losing more than 60% of their value thus far this year, shares of Coupa rose 27% upon hearing about the transaction. Under the terms of the deal, Coupa shareholders will receive $81 per share, which is 30.5% more than the stock’s closing price on Friday and 77.2% more than on November 22, when the first reports of interest in a takeover of the company were made.
An affiliate of the sovereign wealth fund Abu Dhabi Investment Authority makes a minority investment in the all-cash transaction, which has an enterprise value of $8 billion, including debt.
This year, global stocks have been hammered by high inflation, weak consumer demand, and the Ukraine crisis, with the tech industry suffering the most. This has made some software companies attractive acquisition targets for private equity firms, despite the fact that there isn’t enough bank debt financing to make deals.
A group of 19 direct lenders, led by Sixth Street, are contributing $2.6 billion to the acquisition of Coupa Software by Thoma Bravo. This financing comes in part from the loan package. According to people familiar with the situation, HPS Investment Partners, Oaktree Capital Management, Apollo Global Management Inc. (APO.N), and Blackstone Inc. (BX.N) are additional direct lenders on the deal.
After similar deals involving software companies such as Anaplan, Ping Identity, ForgeRock, and Sailpoint Technologies, Thoma Bravo’s most recent acquisition this year is Coupa Software.
HMI Capital, an investor in Coupa, had stated earlier this month that it would support a potential deal for the company that would cost more than $95 per share.
Coupa Software, which went public in 2016, makes software for managing businesses’ spending that helps them keep track of their purchases of goods and services. Coupa was advised by Qatalyst Partners, Freshfields Bruckhaus Deringer, and Goldman Sachs & Co., Piper Sandler, and Kirkland & Ellis, and Thoma Bravo was advised by Goldman Sachs & Co., Piper Sandler, and Kirkland & Ellis. It reported a net loss of $84.1 million for the quarter that ended on October 31.
