Thoma Bravo snags Coupa for $8B despite activist pressure to hold off for higher price • TechCrunch
When the news came out last week that Active investors have taken the unusual step of pressuring Coupa Software arrive Not Selling for less than $95 a share, it caught our attention. You don’t often see investors sending letters asking a company to stop selling. It’s usually the opposite.
But today, the company announced that Thoma Bravo has acquired it for $8 billion. That means $81 a share, still a 77% premium to shareholders, but much less than what HMI Capital was asking for. in a public letter in the first day of this month.
The letter allegedly published rumors that another private equity firm, Vista Equity Partners, was hunting to buy it, but in the end, Thoma Bravo was the buyer along with a wholly owned subsidiary. The Abu Dhabi Investment Authority (ADIA) also participated. in the agreement as a minority investor. Thoma Bravo has a long history of acquiring mature enterprise software companies and taking them private.
Coupa, which makes spending management software for large businesses, has had a rough year in the stock market and, like many SaaS companies, feels the ire of investors looking to profit rather than growth. The company’s share price is down 64% year-to-date and down more than 2.5% before the transaction, suggesting perhaps investors aren’t happy with the deal.
Company CEO Rob Bernshteyn was as pleased with the deal as you’d expect, saying customers can expect a similar level of service, regardless of who signs the check.
Roger Siboni, Coupa’s top independent director, said that the company had reviewed the current economic situation and decided it was a deal worth making. “The board evaluated the transaction based on the company’s independent outlook in the current macroeconomic environment and determined that certain and attractive cash considerations in the transaction provided risk-adjusted value. risks outperforming the Company’s independent outlook. The Board of Directors unanimously believes that this transaction is the optimal way forward and is in the best interest of our shareholders,” he said in a statement.
Although the board has agreed to terms, it will be interesting to see if shareholders are friendly with the deal when they meet early next year. It looks like HMI Capital, which owns a 4.8% stake in Coupa, will lead the charge against the deal if the letter the company released is any indication of its feelings about the deal. The company is undervalued at this price.
If the deal goes through with the participation of shareholders and regulators, the deal is expected to close in the first half of 2023. Surprisingly, according to HMI’s letter, the deal does not clauses included, which will allow Coupa to continue looking for a better deal.