Rob Bernstein, CEO, Coupa Software
Scott Mlyn | CNBC
Coupa Software said on Monday it will sell itself to private-equity major Thoma Bravo for $6.15 billion in cash, calling the deal the “optimal path forward” as broader economic uncertainty hammers technology stocks.
News of the deal sent Coupa’s shares up 27% in premarket trade, after a more than 60% drop in the year so far.
Coupa will get $81 per share under the deal, 30.5% higher than the stock’s closing level on Friday and 77.2% above Nov. 22, when taking over interest in the company was first reported.
High inflation, weak consumer demand and the Ukraine crisis have slammed global stocks this year, with the tech sector being among the worst hits. That has allowed PE firms to buy high-growth software companies at lower valuations.
Over the last two years, Thoma Bravo has acquired Ping Identity, Sophos, Proofpoint and Sailpoint Technologies.
“The transaction provides superior risk-adjusted value relative to the company’s (Coupa’s) standalone prospects,” said Roger Siboni, an independent director at the software firm.
The all-cash deal, which has an enterprise value of $8 billion, includes a minority investment from an affiliate of the sovereign wealth fund Abu Dhabi Investment Authority.
Earlier this month, Coupa investor HMI Capital had said it would support a potential deal for more than $95 per share for the company. It did not respond to a Reuters request seeking comment.
Vista Equity Partners was also interested in the company, which Bloomberg News had reported last month.
Coupa Software, which went public in 2016, provides business-spend management software, which helps companies manage the purchase of goods and services.
Qatalyst Partners and Freshfields Bruckhaus Deringer advised Coupa, while Goldman Sachs & Co, Piper Sandler, and Kirkland & Ellis were advisors to Thoma Bravo.
Separately, the Coupa reported a 17% rise in total revenue for the quarter ended Oct. 31 and a net loss of $84.1 million.