When the news surfaced last week, activist investors were taking the unusual step of pressuring Coupa Software to not selling for less than $95 a share caught our attention. You don’t normally see investors send a letter asking a company to hold a sale. It is typically the opposite.
But today the company announced that Thoma Bravo is acquiring it for $8 billion. That equates to $81 per share, which is still a 77% premium for shareholders, but well below what HMI Capital was asking for in a letter made public earlier this month.
The letter believed to have published rumors that another private equity firm, Vista Equity Partners, was looking to buy it, but ultimately Thoma Bravo was the buyer along with a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) also participating. in the operation as a minority investor. Thoma Bravo has a long history of acquiring mature enterprise software companies and taking them private.
Coupa, which makes expense management software for large enterprises, had a tough year in the stock market, like many SaaS companies, feeling the wrath of investors who seek profit rather than growth. The company’s share price is down 64% year-to-date and more than 2.5% pre-trade, suggesting investors may not be happy with the market. OK.
Company CEO Rob Bernshteyn put a happy face on the deal, predictably, saying customers can expect a similar level of service regardless of which owner signs the deals. checks.
Roger Siboni, Coupa’s lead independent director, said the company considered the current economic climate and decided it was a worthwhile deal. “The Board of Directors has assessed the transaction against the company’s stand-alone outlook in the current macroeconomic climate and has determined that the compelling and certain cash consideration of the transaction provides superior risk-adjusted value compared to the stand-alone outlook of the society. The Board of Directors is unanimous in believing that this transaction is the best way forward and in the best interests of our shareholders,” he said in a statement.
Although the board unanimously agreed to the terms, it should be interesting to see if shareholders are as supportive of the deal when they meet early next year. It looks like HMI Capital, which owns 4.8% of Coupa shares, will lead the charge against the deal if the letter released by the company is any indication of its feelings about the company being undervalued at this price. .
If the deal is successful with shareholders and regulators, it is expected to close in the first half of 2023. Surprisingly, given HMI’s letter, there is no shopping provision with this deal, which would allow Coupa to keep looking for a better deal. .