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Tech-focused private equity firm Thoma Bravo is said in advanced discussions to purchase Coupa Software (NASDAQ:COUP) after outbidding rival PE firm Vista Equity.
A deal may be announced as soon as this week, according to a Bloomberg report, which didn’t include a deal price. The transaction price may be $81 a share, according to a tweet from CNBC’s David Faber. An $81 price would value Coupa at more than $6 billion and would represent a 77% premium to where the stock traded before news of a potential buyout offer, though it would still represent a more than 50% discount to Coupa’s 52-week high.
The news comes after after Bloomberg reported Nov. 23 that Vista Equity was said to be exploring a possible purchase and had held talks with the company, sending the shares surging almost 30% that day.
Coupa (COUP) shares jumped 8% in after hours trading on Friday after a Bloomberg report that private credit firms were said to be working on a $3 billion debt package to help finance a PE takeover of Coupa.
A potential $81 a share may not satisfy all shareholders. Last Monday top Coupa (COUP) shareholder said the software firm should be able to garner at least $95 a share after it received takeover interest. HMI Capital Management, which has a 4.8% stake in Coupa, said it won’t support a deal unless it’s at the right price and follows a sale process.
Another top shareholder, Meritage Group, which has a 5.3% stake in Coupa, also contacted Coupa (COUP) to express its views regarding a potential transaction and the price per share that they believe would be in the best interests of holders.
Recent conversation with investors indicate Coupa (COUP) could see a price of $75-$80 a share in a takeout, (~8x NTM Sales), Morgan Stanley analysts led by Keith Weiss wrote in a Thursday note.. Based on a ~10x NTM sales multiple, there’s a “reasonable framework” for Coupa to see ~$100 share in possible takeover.
Coupa Software (COUP) could see a takeout price of $80/share in a possible acquisition, Raymond James analyst Brian Peterson said last month.
A potential deal with Thoma Bravo comes after the PE firm announced Wednesday that it raised more than $32.4 billion for three new buyout funds. Thoma Bravo has been very busy with tech deals this year especially cybersecurity firms, picking up SailPoint Technologies for $6.9 billion in April, Ping Identity for $2.8 billion in August and it agreed to buy ForgeRock (FORG) for $2.3 billion in October.
Investors may find out more about a possible Coupa (COUP) takeover as it’s set to report Q3 results on Monday after the close.
