When information surfaced final week that activist investors were taking the unusual step of pressuring Coupa Software to not promote for lower than $95 a share, it bought our consideration. You don’t usually see traders sending a letter asking an organization to carry off on a sale. It’s usually the other.
However right now, the corporate introduced that Thoma Bravo was buying it for $8 billion. That works out to $81 a share, which nonetheless represents a 77% premium for shareholders, however effectively beneath what HMI Capital was asking for in a letter made public earlier this month.
The letter believed printed rumors that one other non-public fairness firm, Vista Fairness Companions, was within the hunt to purchase it, however ultimately, Thoma Bravo was the client together with a completely owned subsidiary of the Abu Dhabi Funding Authority (ADIA) additionally collaborating within the deal as a minority investor. Thoma Bravo has a protracted historical past of buying mature enterprise software program firms and taking them non-public.
Coupa, which makes spend administration software program for big companies, has been having a tough yr within the inventory market, like many SaaS firms, feeling the wrath of traders searching for revenue over progress. The corporate’s inventory worth was down 64% year-to-date and was down over 2.5% in pre-trading, suggesting that maybe traders aren’t proud of the deal.
Firm CEO Rob Bernshteyn put a contented face on the deal as you’d count on, saying that prospects can count on the same degree of service, no matter who the proprietor is signing the checks.
Roger Siboni, Coupa’s lead unbiased director stated that the corporate took into consideration the present financial local weather and determined it was a deal price taking. “The Board evaluated the transaction towards the corporate’s standalone prospects within the present macroeconomic local weather and decided that the compelling and sure money consideration within the transaction gives superior risk-adjusted worth relative to the Firm’s standalone prospects. The Board is unanimous in its perception this transaction is the optimum path ahead and in the perfect curiosity of our shareholders,” he stated in an announcement.
Whereas the board of administrators has unanimously agreed to the phrases, it must be fascinating to see if the shareholders are as pleasant to the deal after they meet early subsequent yr. It might appear that HMI Capital, which owns 4.8% of the Coupa inventory, will lead the cost towards the deal if the letter the agency printed is any indication of its emotions concerning the firm being undervalued at this worth.
Ought to the deal cross muster with stockholders and regulators, it’s anticipated to shut within the first half of 2023. Surprisingly, given HMI’s letter, there isn’t any go-shop provision with this deal, which might permit Coupa to maintain searching for a greater deal.