Thoma Bravo acquires Coupa Software for $8B

Thoma Bravo LP said in an announcement that was released on Monday, Dec. 12, that it has agreed to buy Coupa Software for $8 billion. The acquisition deal will be paid in cash, and the American private equity and growth capital firm called the agreement an “optimal path forward” amid the economic uncertainties that are negatively affecting technology stocks.

As per Reuters, the news of Coupa Software being acquired by Thoma Bravo software investment firm sent its shares soaring by 27% in premarket trade. The increase happened after the company saw a more than 60% drop in the year.

Under the deal, the San Mateo, California-headquartered firm will get $81 per share, which is 30.5% higher compared to the stock’s closing rate on Friday last week, and 77.2% higher than the Nov. 22 level when the takeover plans were first reported.

It was mentioned that the all-cash deal has an enterprise value of $8 billion and includes a minority investment from an affiliate of the Abu Dhabi Investment Authority sovereign wealth fund.

The surging inflation and slow consumer demand, coupled with the crisis in Ukraine, have battered global stocks this year. Tech businesses around the world are the worst hit by the situation, and this allowed private equity companies to purchase high-growth software companies at lower valuations.

The deal between Thoma Bravo and Coupa Software was said to have been approved unanimously by the latter’s Board of Directors. The transaction is expected to be completed in the first half of 2023 but is still subject to customary closing conditions and regulatory approvals. While the deal is hinged on the approval of the software firm’s shareholders, it is not subject to financing conditions.

"For more than a decade, we've been building an incredible Business Spend Management Community and have proudly cemented our position as the market-leading platform in our category,” Coupa’s Chief executive officer and chairman, Rob Bernshteyn, said in a press release. "We are looking forward to partnering with Thoma Bravo and accelerating our vision to digitally transform the Office of the CFO," While our ownership may change, our values do not.

Coupa’s lead independent director, Roger Siboni, further said that the deal “is the result of a deliberate and thoughtful process that included engagement with both strategic and financial parties.”